Savings is the first step toward wealth creation. This is something most of us learnt from our childhood and is still valid today. However, the only difference today is that we have a savings plan to help us build and maintain our savings.
There are a lot of savings plans available in the market, which creates difficulty in deciding which one to choose. Therefore, here are some factors that can help you choose the best savings plan for you.
Factors to Choose the Best Savings Plan in 2022
Here are the factors that will help you choose the best savings plan in 2022:
- Financial objective
The first factor to consider while you invest in the best money-saving plans is your financial objective. For example, it can range from your retirement to your child’s higher education or marriage, etc. Once the goal is set, you will be able to decide the type of savings plan to choose.
- Risk profile
The second factor that is to be assessed is your risk profile and risk-taking capacity while choosing a good savings plan. The elements that can help in deciding the amount of risk are your age and personal inclinations. For example, people in their 20s and 30s can opt for such a savings plan that holds significant risk and offers a high rate of return.
The other options available for such an age group are investing in the stock market or equity rather than investing in debt markets. A savings fund, a general one, would be great for people who are willing to take less risk. Additionally, you can also get risk-free guaranteed returns if you opt for plans like the Tata AIA savings plan.
- The time period of investment
Another important factor that helps in choosing the best saving plan in India is the time period of your investment. Therefore, you will find many plans that provide a medium to long-term investment horizon. Besides, savings plans would also help you in saving taxes and increase your funds during the period of investment.
Moreover, even if you invest a small amount of money to buy a savings plan, a large corpus can be built over the period of investment.
A flexible plan is considered to be an ideal plan because it lets you fulfil all your short-term as well as long-term goals. However, when it comes to flexibility, it should not be just about financial goals; your plan should also be flexible in terms of premium payments and increasing or decreasing the corpus.
Some plans also have the option to add another person to the plan. For example, a joint life insurance cum savings plan enables you to add two people (you and your spouse) as insured persons.
- Premium rates
The premium of the savings plan is another crucial factor that matters a lot. Therefore, it is essential to understand all the premiums of the savings plan. The plans that hold minimum charges and are flexible in terms of the duration of investment, interest and withdrawal are usually preferred. However, you need to be careful because lower premium rates do not always mean that it is a good savings plan for you.
It is also an essential factor to check the different features and highlights of an online money-saving plan. You will find different features depending on the type of savings plan you choose. For example, some plans offer a fixed time period of investment, such as 5-10 years or 30-35 years.
On the other hand, some plans give you the option to withdraw the part amount after a certain period, and the remaining half will be an added benefit. Basically, an assured savings insurance plan provides you with extensive coverage and flexible alternatives.
The above factors will help you determine the best savings plan per your requirements. However, there are also some other factors pertaining to an insurance service provider that helps you find a better savings plan. This includes checking the service provider’s trustworthiness in the financial market. Moreover, if your savings plans have an insurance component, you can also check the claim settlement ratio of the company.