Investing your hard-earned money for a regular income can be challenging. You must choose the right product in the investment market for increased benefits. It is important to derive a smart decision by evaluating the investment options based on their product features, benefits, flexibility, and cost. So, how can you do it? How to ensure that the investment option will suffice for your financial needs? Here is a detail to help you best in this regard.
 

How To Use Lump Sum Amount?
 

The investment market in India is widening at a large scale. It provides various options for the different categories of investors. There can be two different dimensions to an investment plan. It is investing a lump sum earned or accumulating a specific sum of money for a lifetime investment. Let us consider both scenarios and decide on a viable and preferable solution.

 

Here is a simple guide to help you with an investment plan.
 

• Find your money goals and monthly income financial needs - Before deciding on the plan, you need to analyse your financial needs. For example, suppose the monthly income is for your retirement needs. In that case, you need to calculate the financial requirements based on regular groceries, travel, medical expenses, etc., to choose the right investment option.
  
  
• Analyse different investment options - Different financial institutions and government establishments provide a range of investment options. Here are a few of them you can consider.
  
  
  • Fixed Deposit - If you are a conservative investor, you can choose fixed deposit schemes offered by the banks. In a fixed deposit scheme, you must invest a lump sum amount for a definite period at a fixed interest rate. At the end of the term, you will receive the invested fund with interest earned. However, you can opt to invest the money and receive the interest monthly. The interest rate varies between the banks and can range between 1.5% to 7%.
    
    
  • Annuity plans - One other option is the annuity plan. Financial institutions offer different types of annuity plans. The two most common options are the immediate and the deferred  plans. The immediate annuity plan will start providing a regular monthly income for a definite period immediately after you purchase the annuity plan. And the deferred annuity plan will start providing regular income after a certain period.
    
    
  • Savings insurance plan - A savings insurance plan is a life insurance plan that provides a life cover for the entire policy term and a guaranteed¹ return at maturity. Thus, it combines the life cover and the savings benefit. Insurance providers offer a range of flexible features that help you customise these savings insurance plans based on your financial needs.
    
    For example, our Tata AIA policy provides different payout options, such as receiving the payout as a lump sum, regular income, or a combination of both. You can choose the regular income option based on your preferences and receive it as a monthly income for a defined period or until death.
    
    In addition, life insurance plans will qualify for a tax* deduction and exemption benefit under Section 80C and Section 10(10D) of the Income Tax Act, 1961. You can analyse the different savings plan options online and choose the right one based on the features, cost, and financial requirements. If you have a dependent family, opting for a savings insurance plan is valuable.
    
    
  • Government-based schemes - Government establishments such as the post office provide the monthly income scheme. There are other investment options, such as the Public Provident Fund, National Pension Scheme, etc., wherein you can accumulate  money for a long period, such as 10 to 15 years.
    
    You can accumulate a significant corpus, withdraw a certain portion and invest the remaining amount in an annuity plan for regular income throughout life. The investment plan will be secure as the government manages it.
    
    
  • Equity Market - The financial equity market is another investment option that can yield monthly returns if you make the right purchase and sell options. However, the risk might be more and requires extreme professional financial knowledge. If you lack knowledge or are a busy professional, you can always take expert advice and invest based on their analysis and decisions.
    
    Analyse the different options and decide on the most appropriate choice based on your financial needs.
    
    
• Stay invested - When you have decided on the returns investment plan, you need to stay invested for the best monthly returns. Partial withdrawal can be a feasible option. However, it is not encouraged because it can affect your long-term returns.
   

Which is the Right Investment Plan for Me?
 

While all the different investment solutions seem promising, it gets difficult for you to choose the right investment option. Therefore, you need to understand your priorities, consider your affordability, and analyse the products based on the features and cost to decide on the accurate option that will suit your financial needs.
 

For example, suppose you are the sole earning member of your family and want to earn a regular monthly income by investing a certain amount after a certain period. In that case, you can opt for the guaranteed¹ return savings insurance plan. It will help you accumulate the required savings while also securing funds for your family's future in case of your unexpected demise during the policy term.
 

Conclusion
 

Preparing for an investment plan is certainly a difficult task. Firstly, it is your hard-earned money. And secondly, the main purpose is to serve your monthly financial needs. Therefore, analysing your needs and choosing the right financial plan is important. You can analyse the varied investment options based on your risk appetite to choose the right investment plan. So take a good time to analyse and review your needs and anaylse the options to accomplish your money goals!

L&C/Advt/2022/Oct/2453