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savings plan ideas
  • Best Saving Plans If You Are Earning 5 LPA

  • Published By:
  • Category: Insurance
  • Published Date: January 22, 2022
  • Modified Date: February 12, 2022
  • Reading Time: 8 Minutes

Featured Image Caption: Savings Plan Ideas

Introduction

Financial advisors believe that the ideal time to save money is while you are young and earning, and the perfect age falls when you are thriving in your early 20’s. They believe so because you can multitask and engage at various places to generate income when you are young. However, most younger generations believe in the misunderstood motto ‘you only live once’ and spend money rather than saving.

Earning 5 LPA means receiving Rs 41,000 from the organization on paper. But, after specific mandatory cuts, you might receive Rs 35,000 – 37,000 in hand. You are highly mistaken for those who think that it’s less money to even save from this. If planned wisely, you can generate a pool of savings.

Young blood believes that saving money entails sacrificing enjoyment. It is partially inaccurate, but they don’t bother to imagine the situation where they might end up in an economic swirl that can exhaust their earnings.

Most of the youth doesn’t understand the value and need of savings and savings plan, and it is why this blog will help the astray youth to understand,

  • Why must one save and consider a money-saving plan as an alternative?
  • How does a savings plan operate?
  • What are the advantages associated with the money-savings plan?
  • Which is the best saving plan one can purchase in India?

Are you ready to take a deep dive into the world of knowledge and insights? If yes, continue to read to understand the best possible ways to save for a better and more secure future.

Importance of Savings

For a Secure Future of the Family:

You create a safe and secure financial cushion for yourself and your loved ones if you start saving and investing from a young age. Life is full of hiccups, and one should always have an economical backup to withstand the cash flow. Even in your absence, the family should not compromise with their lifestyle or other needs.

Smooth Post-Retirement Time:

Who would want to work till 60 years and have mere savings in the bank account where you cannot live your old-age dreams? Smart savings can help you have a smooth sail in your retirement phase where you can live your dreams of having a small business, going for vacations, and many more.

To Tackle Emergencies:

None can anticipate sudden death, terminal illness, accident, and other things, and it is where your savings can help you in balancing through the financial crisis.

Wise Investments:

As you save, let it not become a passive saving cycle; instead, try to invest in multiple (reliable) places to reap good profits in return. You can invest in capital, stocks, mutual funds, business, and many more. As you are young, you have both the mental and physical ability to juggle between things.

Importance of Savings Plan

A savings plan falls under the life insurance umbrella that assists individuals in saving, investing, and holding funds to meet future needs and requirements. This beneficial plan is structured so that the insured/policyholder can adapt and maintain hygiene in their savings and earn substantial returns when the policyholder needs it the most.

Such saving plans come with inclusive and customizable features and benefits that cater to the policyholder. However, certain savings plans also come with insurance coverage, allowing you to protect your family’s financial future even if you are dead.

There are different types of savings alternatives available in the market, and they work in various manners. Each genre in a savings plan is tailored to a person’s financial goals based on their income, spending patterns, risk tolerance, the policy period, and other things. Although it is highly suggested that one should indulge in the healthy hygiene of savings, the potential customer should always map his expenses and purchase a savings plan that is more dedicated towards their requirements. For that, they must conduct a comprehensive research.

Different Types of Savings Methods in India

There are different types of investment plans available in India, and all of them cater to the varying needs of a diverse audience. For instance, the money-saving plan can be utilized by a policyholder for their child’s education, marriage, or other significant developments. Moreover, such savings schemes can pave the way to generate additional income and regular income means.

Also, as most of the government’s saving schemes are initiated, the risk of losing money is comparatively less compared to stocks and other fluctuating market trends.

Some of the money-saving schemes are as follows:

Savings Plan:

A savings plan helps achieve an individual’s financial goals, either short-term or long-term. The savings plan also provides insurance coverage and the advantages of wealth creation. The purpose of investing in a savings plan is that – a portion of the premium paid by the policyholder goes toward wealth creation purposes. At the same time, the leftover premium amount is allocated to the life insurance policy. The right savings plan can assist the family in having a smooth sail without sacrificing their dreams, needs, and requirements. Moreover, if the insured lives through the insurance phase then, the whole sum assured is paid at maturity, including collected bonuses (if any).

Fixed Deposit:

Most of us have heard this term from our parents because it is one of the best saving options. In a fixed deposit, you deposit money as per your wish for a specific period, and you shall receive the interest rate that was in force at the time of deposit. Even though it is a secure and reliable saving option, it is also considered a passive saving scheme as it is not getting multiplied faster.

Unit Linked Insurance Plan:

This saving plan is considered one of the best saving options as it combines both insurance and investment, making it a wise decision for savings. This saving option allows the policyholder to participate in various financial products such as – bonds, mutual funds, and stocks.

Public Provident Fund:

This savings scheme is also considered one of the safest saving methods because the government backs it. Now, as the deposit made to a PPF account qualifies for a tax deduction under section 80C of the IT Act, the method pays you a 7.6% annual interest rate compounded yearly. Under PPF, an individual can invest a maximum of Rs.1.5 lakhs annually with a minimum of Rs.500.

Then, there are other saving policies initiated by the government such as,

  • Sukanya Samruddhi Yojana
  • Atal Pension Yojana
  • Pradhan Mantri Jan Dhan Yojana

What are the Best Saving Plans in India?

After having a good peep through the savings world, let us dive through some of the best savings plans available in India. And they are as follows:

Aditya Birla Sun Life Insurance Assured Savings Plan

This savings plan by ABSLI offers a combination of life insurance and savings perks to protect your family from economic difficulties when you meet with unfortunate events. Apart from that, it also helps accumulate lump sum benefits to prepare a secure monetary net.

Some of the benefits and features of ABSLI Assured Savings Plan are as follows:

  • Death Benefit: Under this feature, the nominee(s)/beneficiary shall receive the death benefit if the policyholder meets with untimely death and if the policy is still active.
  • Maturity Benefits: Under this bunch of benefits, the policyholder shall receive a lump sum if the Insured survives through the policy term and all the premiums are paid.
  • Joint Protection Plan: You can add your wife and make her the secondary life insured as a policyholder under this provision. Here, the secondary life insured (spouse) coverage will be equivalent to 20% of the policyholder’s sum assured.

Then, there are Riders, a bunch of benefits that come with extra cost. They are beneficial to add more value to the savings plan as riders are designated to cater to specific needs.

Aditya Birla Sun Life Insurance Assured Income Plus

This promising savings plan ensures that your family’s long-term objectives and wishes are met by providing life insurance coverage when the policy term is in force and a guaranteed income for 20, 25, or 30 years. Isn’t this a seal the deal worth option?

Some of the features of the ABSLI Assured Income Plus plan are as follows:

  • Survival Benefit: Under this feature, the policyholder shall receive the income benefit at the end of the policy, but you will be availing this benefit based on the payout the frequency you choose, and they are – Income benefit with return of premium, income only benefit option and loyal addition.
  • Death Benefit: The death benefit will be given to the nominee(s) if the policyholder meets with unfortunate death. Here, the beneficiary will have the option of receiving the death benefit in a yearly or monthly pattern instead of getting paid in a lump sum.
  • Maturity Benefit: Under this benefit, the policyholder can exercise the commutation option after the policy ends, and if you would want to receive a lump sum instead of the Income Benefits, the commuted value of the value will be paid as a lump sum.

Note: Always read through the brochure to get a clear idea about the policy, percentages, and applicability.

Conclusion

Earning 5 LPA and lending a hand towards saving is possible only if you think and invest in the right direction. Having a savings plan is mandatory because when sad clouds surround it won’t check for your bank balance, they arrive in life as a self-invited guest to disrupt the status quo of the pocket.

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