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.

LEAVE A REPLY

Please enter your comment!
Please enter your name here

NOW TRENDING

20 Best Couchtuner Alternatives that Might Interest You for 2020

Couchtuner is one of the widely used app for watching television series, movies and listening songs. Since after the introduction of high membership people...

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...

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...

How to Use Tinder Without Facebook – 3 Ways to Sign in Tinder

Are you a married man or woman or teenager who wants to use Tinder without Facebook either to hide your Tinder activity from your...

Neko Atsume Cats – A Guide to Collect All Neko Atsume Rare Cats

Neko Atsume Cats A weird cat collector game is known as Neko Atsume. However, really don’t you need to play or pet with these little...

LATEST STORIES

Nail Microsoft 70-742 Test Easily with Practice Tests

Beyond producing cutting-edge software that is shaping the future, Microsoft worthily stands among global corporations providing a wide array of IT certifications...

5 Tips for Managing Your Online Loan

So you’ve managed to secure an online loan. You have paid off whatever bill was causing you grief, whether it was a...

6 Reasons Why Getting an MBA Online Could be the Best Decision an Engineer Could Ever Make

More and more engineers are considering getting an MBA online these days, and they have evolved a lot since their inception not...

4 Rules a Designer Need to Follow When Designing Business Cards

You can find all kinds of advice for designing a basic or fantastic business card. However, choosing a great logo doesn’t matter...

Why Salon Booking Software Is Crucial To Managing Salon?

Managing a spa is quite complicated, and managing things in a quite assembled way is not a cup of tea. But you...