Building Your Financial Foundation: The Importance of a Savings Plan

Getting your finances in order is important for anyone who needs to reach their goals. Having a savings plan and health insurance are two examples of this. A savings plan is a type of financial tool that assists you reach your financial goals by encouraging you to save money in a smart way and providing you stable returns.

The average Indian household saves around ₹15,000 per year. That’s really significantly less if we compare the current economic reforms. Well, We have a solution for this. You can choose a savings plan which is packed with the following features:

Features of savings plan

• Maturity benefit

A savings plan has an assured maturity benefit. This ultimately means that you will receive a fixed amount of money at the end of your policy terms, regardless of the performance of the market. This helps in achieving your financial goals faster.

• Steady returns

The savings plan has safe and steady returns. This means that you can be confident that your money will grow over time, even if there is any volatility in the market.

• Flexible premium payments

In a savings plan, there are various options for premium payments, which you can choose from, like monthly, quarterly, half-yearly or annually. You can choose according to your convenience. This makes it easy to fit the plan into your budget.

• Life cover

In case of some unfortunate event that happens to you, a savings plan comes with a life cover that provides financial security to your loved ones. This means that your family will be financially protected if anything happens to you.

These were the features of the savings plan. Now let’s understand the benefits of choosing a savings plan.

Benefits of choosing a savings plan

• Tax savings

Under section 80C of the income tax ACT savings plan offers tax benefits. This means you can claim a deduction of up to 1.5 lakhs on the premium you pay for a savings plan.

• Retirement savings

A savings plan helps you in building a corpus in your retirement. You can quickly turn a month’s savings plan into aidful retirement savings by saving a specific amount regularly. Over 30 years, a savings plan can lead to a sizeable amount which can be used to generate a pension for your retirement.

Things to keep in mind before choosing a savings plan

• Goal setting

It is important to set up your goals before choosing a savings plan. The goals can be various things like buying an expensive car, going on a dream vacation, building your new home, funding your children’s education, or having a relaxing retirement.

• Flexibility

In case of any financial emergency a flexible plan can allow you to withdraw money. This will help you in aiding unforeseen events. Many savings plans offer flexibility in choosing the premium payments and payout method per your requirements. You should look for flexible features when choosing a savings plan.

• Plan features

Different plans come with different features, and you must pay attention to how a feature is beneficial to you. It is best to pick a plan that offers a variety of payment options, free withdrawals, and other advantages. You should also look for a brand name you can trust so you know your money is safe.

Conclusion

When it comes to money, a savings plan can assist you reach your goals. You can choose the right plan for you by thinking about your goals, how much risk you are willing to take, and how flexible you need to be. A savings plan can help you build a strong financial base for the future if you plan it good.