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Step-by-Step Guide To Choose The Apt Savings Plan In India

Financial protection should be a primary goal in your life. It will help you manage your current financial requirements and secure funds for accomplishing future family commitments. So, how do you go about ensuring financial protection in your life? Financial institutions in India have been offering different products to help people start saving funds for their future based on their financial needs. Therefore, you can choose from the various options available by comparing the features and choosing the most affordable product to satisfy your financial obligations. Here is a guide to help you choose the apt savings plan in India.
 

Before we get started, let us understand the importance of having a savings plan in your life.
 

Why is a Savings Plan Important?
 

A savings policy is essential to help you lead a peaceful life. Here are a few reasons to state its importance.
 

  • It can regulate your expenses
  • It can help you accumulate funds to accomplish future financial goals
  • It can help you develop the discipline of saving funds regularly
  • It can ensure you benefit from long-term investments
  • It can be resourceful in managing your liabilities
  • It can help you secure your family in your absence
  • It can ensure you benefit from tax*-saving plans in India
     
How to Choose The Best Savings Plan In India?
 


Choosing the apt savings policy in India is simple, provided you get the steps right. 
 

  • Analyse your current financial condition - Understanding your current financial condition is the primary step. It will help you know your spending pattern based on your income. You must regulate your expenses and set aside a fund to save regularly. To meet these financial needs, you can make a well-defined financial budget allocating funds for your groceries, clothing, entertainment, travel, etc.
  • Set your financial goals - The next and most important step in choosing a savings plan is finding your financial goals. You might have short-term financial goals, such as purchasing a new car or paying for your child's education, and long-term goals, such as getting your child married, starting a new business, etc. Know your financial goals and set timelines to satisfy the same. It will help you decide the investment period for the savings plan. It would help if you always planned for a long-term investment because the longer the investment period, more the funds you can accumulate.
  • Research savings plan options in India - There are different types of savings plan options in India. You need to research, analyze and choose the most suitable product. The basis of analysis can be based on the following aspects.

    • Long-term investment benefit - The longer you save funds in a policy, more the benefits. There are different types of long-term savings plans in India, such as the Public Provident Fund, National Pension Scheme, etc. You can consider these products and evaluate their benefits based on the costs involved.
    • Guaranteed1 returns - If you have definite money goals or are the sole earning member in your family, you should ensure that the savings plan is secure and provides guaranteed1 returns. Life insurance providers in India offer savings insurance plans that provide a life cover for the entire policy tenure and guaranteed1 returns at maturity. As the returns are guaranteed1 in the life insurance and savings plan, you can choose the premium and the policy tenure based on your financial goals and the timelines to achieve the same.
    • Risk profile - If you opt for a savings plan that combines the benefit of receiving market returns, you need to consider your risk appetite and choose between equity, debt, and hybrid fund options.
    • Liquidity - While long-term investment plans are beneficial, sometimes your family might demand funds for a short-term goal or an emergency. In such scenarios having a savings plan with increased liquidity benefits is important. You can choose products that allow partial withdrawal after a short investment period.
    • Flexibility - Flexibility is an important feature that defines the ideal savings plan. It will help you save funds for the future without affecting your current financial conditions and determine the apt options to receive the payout benefits. For instance, our TATA AIA Life, provides savings insurance plans that provide flexibility in the premium payment option helping you choose between the regular and limited premium payment options. If you feel the monthly investment plan is affordable, you can choose it for the entire policy tenure or a limited term. In addition, you can choose the payout options for the guaranteed1 savings plan between the lump sum, regular income, or a combination of both to manage your financial obligations.
    • Online features - With the emerging technological advancements, you must choose products that offer online access to purchasing and managing the investment. It makes the process simple, easy, and cost-effective.
    • Tax*-saving benefits - Investing in savings plans in India will help reduce your taxable* income if you choose the right products. The Income Tax Act 1961 provides a tax* deduction benefit of up to ₹1,50,000 for saving in savings plans such as the savings insurance plan, Equity Linked Savings Scheme, National Savings Certificate, etc. In addition, the life insurance return and the death payout will qualify for a tax* exemption benefit under Section 10(10D) of the Income Tax Act 1961.

Based on these factors, you can consider the best product that will satisfy your financial needs and is affordable for the longer term and start saving funds on it. Ensure purchasing multiple products and a diversified portfolio to secure your investment from the risks based on the chosen products.
 

  • Revise your savings plan -Considering the changing circumstances, priorities, and financial needs, revise your savings plan to accommodate the changes and invest in it better and longer for financial security.

While choosing the right savings plan is important to secure your financial condition, it is important to make the relevant decisions early in life to develop the habit of saving regularly at ease and saving funds for a longer term and accumulate more funds.
 

Conclusion
 

Financial planning based on savings plans in India can ensure you attain financial independence. It can help you manage your family's financial obligations, pay for emergencies, accomplish future financial goals and save on taxes*. Different savings plan options with various flexible features help you customise them based on your needs. Therefore, understanding your financial condition, calculating your needs, and comparing the products will help you find the right savings plan option.

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Tata AIA Life Insurance

A joint venture between Tata Sons Pvt. Ltd. and AIA Group Ltd. (AIA),  Tata AIA Life Insurance  is one of the leading life insurance providers in India. We post everything you need to know about life insurance, tax savings and a variety of lateral topics such as savings and investments in this space. You can access and read a host of different blogs, articles and pages at the Tata AIA Life Insurance Knowledge Center or get in touch with us with any queries or questions!

View all posts by Tata AIA Life Insurance

Frequently Asked Questions

What are the benefits of a savings plan in India?

The most important benefits of a savings plan in India are:
 

  • Helps you accomplish money goals based on a financial plan
  • Helps regulate your expenses and manage an emergency
  • Helps reduce taxable income
  • Helps develop the discipline to save funds regularly
  • Helps you lead a comfortable life
  • Helps secure your family in your absence
  • Helps in managing your liabilities

How to start saving funds for the future?

You can start saving funds for the future by

 

  • Setting your financial goals early in life.
  • Analysing your financial condition and allocating funds for the necessities based on a budget.
  • Reserving funds regularly to save for the future.
  • Starting to save funds for the long term.
  • Revising the savings plan based on the changing scenarios.

Disclaimer

  • Insurance cover is available under the product.
  • The products are underwritten by Tata AIA Life Insurance Company Ltd.
  • The plans are not a guaranteed issuance plan, and it will be subject to Company’s underwriting and acceptance.
  • For more details on risk factors, terms and conditions please read sales brochure carefully before concluding a sale.
  • This blog is for information and illustrative purposes only and does not purport to any financial or investment services and do not offer or form part of any offer or recommendation. The information is not and should not be regarded as investment advice or as a recommendation regarding any particular security or course of action.
  • Please know the associated risks and the applicable charges, from your Insurance agent or the Intermediary or policy document issued by the insurance company.
  • Every effort is made to ensure that all information contained in this blog is accurate at the date of publication, however, the Tata AIA Life shall not have any liability for any damages of any kind (including but not limited to errors and omissions) whatsoever relating to this material.
  • *Income Tax benefits would be available as per the prevailing income tax laws, subject to fulfilment of conditions stipulated therein. Income Tax laws are subject to change from time to time. Tata AIA Life Insurance Company Ltd. does not assume responsibility on tax implications mentioned anywhere in this document. Please consult your own tax consultant to know the tax benefits available to you.
  • 1Guaranteed Returns/Payouts depend on Plan Option, Policy Term, Premium Payment Term and Age at entry