Most people know the importance of savings and probably begin to save as soon as they receive their first paycheque. However, people tend to confuse savings with investments. While saving helps you in protecting your earnings, investment enables you to grow them.
In other words, savings and investment are two pillars of wealth creation, the other two being time and discipline. Today, there are numerous ways to grow your savings and investments, out of which we list here the most popular ones.
1. Guaranteed Savings Plan
These are the life insurance plans offering guaranteed returns with an accrued bonus amount on maturity. The sum assured is based on age, premium amount, payment term, and policy term.
The policyholder can pay the premium yearly, half-yearly, quarterly, and monthly.
In the event of death of the life insured, the nominee will receive the sum assured along with accrued bonus till the date of death.
Click here to know more about Guaranteed Savings Plan: https://www.kotaklife.com/online-plans/savings-plan
2. Pension Plans
These are annuity plans that ensure a fixed, regular income for the buyer. Such plans require you to make a lump sum one-time premium payment when purchasing the plan.
The annuity amount is fixed during the plan purchase and remains fixed for the annuity payout period. The annuity payout period can cover the buyer’s lifetime alone or both buyers and their spouses.
The pension amount depends on various factors, such as the chosen annuity options, the annuitant’s age, and the type of plan.
Pension plans are usually of two types-
You’ll immediately start receiving a pension after you purchase the plan.
You’ll have to choose a deferment period while purchasing the plan. The deferment period can be between one to ten years. Your pension will begin after the completion of the deferment period.
Visit here to know more about the different types of Annuity Plan.
3. Public Provident Fund
Public Provident Fund (PPF) is a long-term investment option suitable for risk-averse investors. You can open a PPF account at any designated bank or post office. PPF account has a maturity period of 15 years. Even after 15 years, the account holder can seek multiple extensions in blocks of 5 years.
Currently, the maximum investment in PPF is capped at ₹1.5 lakh per annum. The government regularly revises the rate of return, but it’s usually higher than fixed deposits.
4. Government Bonds
These are the debt obligations issued by the government to fund government spending. Since the government commits to paying the interest and maturity amount, such bonds are considered more secure than corporate bonds.
5. Debt Funds
Also known as liquid funds, debt funds invest money only in debt and money market instruments such as government bonds or treasury bills. Therefore, they are considered secured compared to equity mutual funds or other market-linked instruments.
These funds have high liquidity, making them ideal for parking your excess cash for shorter periods like three months or a year.
Simply put, wealth creation is not rocket science. With little awareness and discipline, you can steadily grow your savings and investment in diverse ways, as discussed above. Remember, you can’t work forever. Therefore, save, invest, and get wealthy—happy riches to you.