Financial planning is vital to tackle the uncertainties of life. The earlier you start, the better.
Many people find it too confusing to start and are continuously bombarded with wrong
information from unreliable sources. One such investment that has a lot of myths around is a
savings plan. You may hear someone saying that it has no benefits or it’s risky or that returns
The best saving plan will secure you financially and let you live stress-free. Not only this, it
creates a financial cushion with the added benefit of tax savings. However, before you search
for the best saving plan out there, it is crucial to clarify the myths surrounding it. Let’s start by
knowing what a savings plan exactly is.
What is a Savings Plan?
As the name suggests, it is a financial plan that helps an individual save for the future. Mostly,
these are life insurance plans. A savings plan promotes systematic investment in a disciplined
manner. Hence, enabling a person to meet his/her financial objectives, both long term, and
short term. An individual can invest according to their risk appetite and make their portfolios.
A savings plan also provides insurance benefits in addition to wealth creation. In case of death
of the insured during the policy period, the beneficiary gets a death benefit. Savings plans have
the backing of the government that makes them the safest option. The best savings plan is low
risk and offers decent returns.
Myths Around Savings Plan
It is always advisable to read and research investment plans before making up your mind just by
listening to the word on the street. Let’s clear the air around the savings plan and bust some
Only Insurance Sector Provides Best Savings Plan
Government has some decent savings plans that provide a good return with more focus on
security. If you are someone that wants their investment to be in safe hands, then government
plans are for you. Public Provident Fund (PPF) and National Savings Certificate ( NSC) are some
of the popular ones.
Does Not Cater To Varied Risk Profile Individuals
A savings plan is versatile and caters to individuals from low to high-risk appetites. A young
person can invest in a Unit Linked Insurance plan to reap the benefits of the market. On the
other hand, a conservative person can choose an endowment plan that has a money guarantee.
Invest In A Single Type For Better Returns
It is always better to invest in a portfolio than a single government plan or entirely in a ULIP. In
expectation of higher returns, over-exposure to a single market can even lead to loss of money.
Invest in a range of savings plans to hedge against the limitations of any one single plan.
Hence, investing in a savings plan is an excellent way to accumulate wealth. The best plan is
flexible and caters to your financial goals. Do not invest just for the sake of tax savings, Instead,
focus on achieving financial independence with the help of a robust plan.