How Useful are Your Tax Saving Investments other than Saving Tax

-

When it comes to investments, one of the topmost benefits that every person considers is the tax saving. A lot of people do not even think beyond the savings that they can enjoy on taxes with the help of different investment plans. However, there are a lot of associated benefits which go beyond just income tax savings tips and can prove to be much more important as well. In this article, we will discuss a few investment instruments and their benefits other than saving taxes.

Life Insurance Plans

Many people invest in insurance plans for the sake of saving taxes. Life insurance is the first instrument anyone or everyone will suggest for your investment portfolio while they give you a dose of income tax savings tips. However, if you choose wisely, insurance plans can do much more. There are four main types of insurance plans available in India.

Term plan: It is a type of life insurance that provides coverage for a certain period of time. In case of the death of the life assured, during the policy tenure, a death benefit (or sum assured) is paid out. Various term insurance plans offer a very high coverage at quite low monthly premiums. It is considered one of the best insurance plans if you want to give your family financial security in your absence.



Endowment plan: These plans offer a lump sum amount at the time of maturity or death. Some plans also offer payment at the time of critical illness.

ULIPs: If you want to see your money grow and enjoy life cover as well, investing in ULIPs is one of the best ways to do so. You will get units in this plan which will fluctuate as per the market price.

Money Back Plans: In such plans, you get not only a lump sum amount but also monthly income as well after maturity.

Public Provident Fund

Also known as PPF, the premium for this fund gets deducted from your salary. You can not only save tax on this, but this plan also gives you a sound financial status after retirement. PPF funds often come in handy in case you need urgent funds in situations like a wedding or critical illness. The lock-in period is 15 years and can be increased indefinitely in blocks of 5 years. Also, the interest rate is 7.6% along with the fact that the maturity amount is totally tax-free.

Fixed Deposits and Recurring Deposits

When it comes to safe investments, there is nothing better than FDs and RDs. Banks provide a stable percentage of interest on FDs. People often invest in these for the sake of saving taxes, but they are much more valuable. FDs can be the funds for the rainy day. No matter you need money for business, illness, wedding or your child’s education, these instruments can be a lifesaver. Also, if you do not want to break your FD, in case of emergency, you can apply for a loan against the amount.

Sukanya Samridhi Yojna

Started as an option to save money for your girl child, it is now one of the soundest options to save tax. However, the main aim of this scheme is to save money for the education and other necessities of the girl child when she becomes an adult. You can open this account for your girl child up to the age of 10. The best part is that this account will attract a tax-free interest of 8.1%. The account will remain operative for a time of 21 years. It needs to be closed once your child gets married. The amount accumulated can be withdrawn by the girl child.

Mutual Funds

If you are looking for stable growth for a longer period of time or quick growth in a short period, mutual funds are suitable in both cases. Other than saving taxes, you can use mutual fund investment to plan important aspects of your life like- wedding, education, illness, travel, buying a vehicle or even buying a house.

When you plan your investments, think beyond just tax savings. Make sure you read the documents properly and understand all benefits you will get with the investment plan. Do not invest all your money at once place. Ensure you have a sound mix of all available options for the best results.

Avatar
Alisia Watson
Alisia Watson is a brand strategist at My Ultimate Success Tips a.k.a MUS Tips.

1 COMMENT

LEAVE A REPLY

Please enter your comment!
Please enter your name here

NOW TRENDING

5 Best Games Like Mystic Messenger for 2020

If you haven't played Mystic Messenger yet, you probably the kind of person who isn't aware of the latest happenings in the...

How to Change your Game Status in Discord

Discord is something you should familiarize yourself with if you spend most of the time on the internet playing online games. This...

Tinder Super Like – How to Super Like and Undo Super Like on Tinder

Looking for the guide about what actually Tinder Super like is? Do you want to know how you can hit Tinder Super Like to...

Hay Day Derby Tips – Play Guide And Derby Winning Strategy

Derby is the awesome feature being introduced by Super Cell in Hay Day. This made Hay Day players more professional in the game rather...

How to Install ElvUI on Windows and Mac – An Easy Guide

ElvUI is user friendly interface dedicated to World of Warcraft game. This UI increases the  gaming experience of players by permitting to update and customizing...

LATEST STORIES

12 Ways on How To Better Manage Your Outgoing Calls

For most small businesses, the phone still serves as the primary tool for communication. That’s why telephone call handling is really important. 

5 Benefits of Toll-Free Conference Call Services

Toll-free conferencing has been in existence since the 1960s and has been a game-changer in most companies' communication processes. Through conferencing, multiple...

Raymond Animal Crossing – How to get Raymond?

Raymond is one of the most excited about villager of Animal Crossing. He is a smug cat, and since there are only...

4 Secrets to Developing a Successful Mobile Business App

Mobile phones have long since stopped being used solely as the devices for calling and speaking to other people. The majority of...

Beau in Animal Crossing – Is Beau a Boy or Girl in Animal Crossing?

Beau (pronounced as a bow) is a lazy deer who first made his appearance in the Animal Crossing: New Leaf. Since then,...