Articles 1624 views February 10, 2020

Top 10 Best Saving Plans

Saving is important for future financial security and for well being of our family. In the time of need, we rely on our savings for support. A smart way of savings is an investment in Fixed Income Investments. By investing in the fixed deposit you are assured of guaranteed fixed returns on the investment with any risk of loss of investment. Fixed Income Instruments are offered by Governments, banks and companies to encourage the people to invest and earn insured fixed returns.

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Top 10 Best Saving Plans for 2020

1. Life Insurance Plans:

Endowment Plans-

Endowment plans have features and benefits of both insurance plans and saving plans. Endowment plan provides both maturities as well as a death benefit. At the end of the term of the plan, the insured receives the basic sum assured or on the death of the insured during the plan term the basic sum assured is paid to the family of the insured.

Money-Back Plan-

The money-back plan pays a periodic amount to the insured at specific intervals of the plan during the term of the policy and on the maturity of the plan the remaining amount is paid as maturity benefit. In case of death of the insured during the term of the plan entire sum assured is paid to the nominee of the policy without deducting the survival benefits already paid. The plan also offers reversionary and final additional bonuses. It provides survival, maturity as well as death benefit and is guaranteed return savings plan.

2. Fixed Deposit:

Fixed deposits (FD) are offered by NBFCs and banks to provide higher returns to the investors as compared to a regular savings account. It is a financial instrument which offers a fixed rate of interest for a fixed term on a fixed amount. You may not require a separate account for fixed deposit and can be opened with any bank in which you have an account.

3. Recurring Deposit:

Recurring deposit (RD) is offered by Indian Banks. It is a type of term deposit which helps the people who have regular income to deposit every month a fixed part or amount of their income in a recurring deposit. The interest rates in the recurring deposit are similar to interest rates in fixed deposits. Recurring deposit is an ideal savings plan which helps you to keep aside a fixed amount every month and accumulating a huge amount at the end of the recurring deposit term.

4. Public Provident Fund:

Public Provident Fund (PPF) is both a savings plan as well as a tax-saving instrument. PPF has been introduced by the Institute of National Savings of Finance Ministry. The fund aims to mobilise the small savings of the people by offering an investment which provides guaranteed returns and tax benefits.

5. Post Office Deposit:

Post office deposit is a type of term deposit which can be opened for four tenures- 1 year, 2 years, 3 years and 5 years. This savings plan can be used even by a minor above 10 years of age. A term deposit of 5 years also offers income tax benefits under a prescribed section of the Income Tax Act.

6. National Savings Certificates:

National savings certificates are issued by the Indian Government. It is a savings plan which is used for small savings and is a part of the postal savings system of the Indian Postal Service. NCS also act as income tax saving instrument.

7. National Savings Schemes:

National savings schemes are a type of saving plans which are administered by the Indian Government or financial institutions of the public sector. Different saving schemes have a different term, rates and tax treatment. These schemes are backed by government ensuring the safety of the investment.

8. Corporate Bonds:

Corporate Bonds are issued to raise the finance for the expansion of the business, for ongoing operations, and various other reasons. Corporate bonds are issued by corporations. It is a debt security which is sold to the investors and is backed by the physical assets of the corporation which has issued the bonds.

9. Government Bonds

Government bonds are issued by the national government which pays periodic interest which is called coupon payments. Government bonds are also called sovereign bonds which repays the face value of the bond on the date of maturity of the bond. Government Bonds offers guaranteed returns and is a good savings plan.

10. Mutual funds

Mutual Fund is an investment and savings fund which pools the money from the investors and purchase shares and securities. Mutual funds are managed by professionals who diversify the investments of the people in various debts and equity instruments. Mutual funds have various advantages as well as disadvantages as compared to direct investment in shares and securities.

Conclusion

Each of the top 10 savings plan mentioned above has unique features and benefits. These instruments provide fixed income and assure a guaranteed return of investment. The risks involved in fixed-income instruments are very low. Hence, you can consider any of the saving plans as mentioned above as per your requirement and secure your and your family’s future financially.

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