Top 6 Reasons to Opt for a Savings Plan as a Women Investor
Financial independence is necessary for women. Not only does it help them in their finance-related decisions, but financial stability also allows them to offer better choices to their loved ones and family. Women who are already juggling multitasking consider investing a great measure to achieve this financial stability. It helps you stabilise your future goals and aids in fulfilling your short—and long-term goals.
When talking about investments for women, savings plans can be a great option for multiple reasons. First, they offer dual benefits: Your loved ones get the death benefit in case you, the insured, pass away during the policy tenure, and if you survive the term, you receive the maturity benefit to complete the goals you invested in the savings plan for your living years.
Before we see the ‘why’ of investing in a saving plan, here are some types of plans that you can choose from:
- Endowment Plans
Endowment plans provide insurance coverage and a maturity benefit if the insured individual survives the tenure. They can be participating (that comes with bonuses) or non-participating (with no bonuses). Depending on the type of plan you choose, the plans offer lump sum benefits on maturity or death or monthly incomes for regular inflow, ensuring financial security.
- Money Back Plans
Money-back plans provide survival benefits at set intervals throughout the policy term, ensuring liquidity for you, the insured. For example, you choose a 20-year plan. Here you would receive payouts in the 5th, 10th, and 15th years. Once the plan reaches maturity, the remaining benefit is paid out. An important feature of a money-back plan is that in the event of the death of the insured, a full death benefit is paid, regardless of the payouts already made.
- Other Options
Some other popular savings plans are:- National Savings Certificate (NSC)
- Public Provident Fund (PPF)
- Employee Provident Fund (EPF)
- Kisan Vikas Patra (KVP)
- Sukanya Samriddhi Yojana (SSY).
Now, let us take a look at some reasons why savings plans are one of the best investment tips for working women.
- Promise of Returns
The best part about buying a savings plan is the assurance of a fixed. So, if you’re new to the financial landscape or if you are hesitant to invest because of market risks, then investing in a savings plan is the best option for you. When you know about the policy payout, you can plan your financial goals accordingly. For example, you can use the proceeds for long-term goals like buying a house, saving for your children’s higher education, or your retirement.
- Better Financial Benefits
With a savings plan, you get enhanced financial coverage. This gives you the assurance that even if something unexpected happens, your family will get the required financial support. A savings plan is a great way to prevent the financial burden on your family in case of your sudden death, accident, or disability. Thus, a savings plan can provide enhanced financial coverage, with payouts when needed.
- Fund Value Never Depreciates
Another reason why a savings plan is a must-have for female investors is its no-depreciation feature. Most savings plans are immune to market ups and downs, and their fund value remains unaffected because of the same. Further, this also means that your investment is safe from extremes of inflation and other factors.
- Improves Financial Discipline
Savings plans are designed with distinct durations. Here, you need to pay a distinct fixed amount at a regular interval. This payment may be monthly, bi-annually, or annual. No matter what its nature, investing regularly instils a habit of financial discipline in you. Further, when you’re continuously keeping an amount separate for your investment purposes, this also positively impacts your spending, making you spend wisely.
- Tax Benefits
Another catchy feature of savings plans is the great tax benefits they offer. Their premiums are deductible from your taxable income. This means that under the provisions of the Income Tax Act of 1961, you get to claim up to ₹ 50,000 in tax deductions. Thus, it will be fair to say that savings plans are great instruments for tax planning.
- Fixed Returns + Bonus
As mentioned earlier, with savings plans, you have the assurance of getting fixed returns. But what’s more amazing is that you also get the chance to earn a bonus. Sounds great, right? Well, it is. If the insured manages to pay all their due premiums on time, the company may reward them with a bonus. This can further enhance your plan benefits and help you get higher returns on the completion of the policy tenure.
Wrapping Up
These are some of the benefits that make a savings plan a must-have for all women investors. In addition to these, you also get to enjoy other benefits like loan facilities, retirement security, and much more. Even when talking about the best investment tips for working women, it would be a wise choice to have savings plans in your portfolio. They give you security along with financial independence, allowing you to have a confident place in your family and live an independent life.
