An investment plan is a method of saving money. It is financial planning taking into account the financial resources of an individual in order to meet a certain goal that the individual wishes to attain. This can be done through a variety of investment plans that are provided by the Government, different banks and even certain insurance companies as well.
Saving up money has never been easy the money gets spent in one way or the other. Temptation to spend the money even for small purposes have always been the human tendency. An investment plan helps in money to accumulate for an individual over a period of time so that he/she can reap the reward of investment at the end of maturity of the plan.
Why Should You Opt for An Investment Option?
Best investment options are meant to help anyone the financial goals that they are supposed to or want to have over the years. The investment plan is planning of how to achieve the financial goal for the person. These goals are met through saving up money step by step with a trusted bank or company and watching the money grow over time.
Some of the reasons why an investment plan is necessary are as follows:
- Managing the steady income and expenditure ratio of an individual and helping them to be on track with their financial goals,
- Helping cash grow over a period of time.
- Safety and security for the individual after the maturation of the investment plan as the cash can be used for retirement and many other purposes.
- Investment plans improve the standard of living for an individual with time.
- Investments are saving accounts. The savings are such that the individual is not allowed to touch the amount before the plan is terminated or matured.
- Investment plans are like piggy banks for adults who need to save money that is utilized later.
- A fund manager or a financial adviser help you in planning your finances, point out the shortcomings in income and savings and point you in the right direction. Above all, the fund manager also takes care of the investment plan and constantly reports the status of the plan to the owner.
Why Choose A Safe Investment Plan?
A safe investment plan is a plan that helps in attaining the financial goals of a person, alone with being risk free. Only a handful of plans are completely risk free. However, there are a number of very low risk plans that are quite popular among the public as of today.
Choosing a safe and a reputed investment plan is an insurance for the individual that their money is safe and that they will get the full return with added interest of the amount that they have deposited.
There are a great number of risks when it comes to money. The policies of the bank or the company when it comes to investment plans need to be thoroughly revised beforehand. Money in banks are at risk of being used as tax money, in such a case the investor will lose money. Those investments that have high tax exemptions or no tax exemptions at all are the most popular plans.
What to Keep in Mind for Choosing an Investment Plan
An investment plan is a sure method of knowing that money is safe and growing for an individual. In the market there are a number of investment plans, but certain points need to be kept in mind before an investment of any sort is made. Certain questions should be answered by the insurance plan like:
- Does the plan meet the financial goal that you are looking for?
- What are the risks that come alone with the investment plan?
- What is the interest rate of the plan?
- What is the minimum locking period for the plan?
These are important questions that need to be asked and answered by the investment plan providers. the investment plans are based off of these questions as well.
The Best Investment Options
There are a number of investment options in the market for a safe investment deposit. The safest investment plans are the ones that insure a maximum deposit with minimum risk chances. The best investment plans are also the ones that have high premium rates and a small locking period.
In India, some of the best investment plans are the plans that are offered by banks and other insurance companies. Fixed deposits, PPF, A senior citizen scheme are some of the different ways of investing money and seeing it grow over the years.
There are plans that offer the least amount of tax deduction and nearly zero tax reduction like fixed deposit plans and PPF plans. These are hence, more preferred as an investment compared to other plans. However, the options for different types of plans are all present in the market as of today.
Different Investment Plans
If it comes to an investment plan, there are different options that are there in the market to choose from. The first step for the plan is to plan out the desired outcome from the investment, the requirement of the plan itself and the different features of the plan. Investments can be divided into short term investments and long term investments depending on the requirement of the individual who is investing.
Short term investments are funds that are collected over a period of as less as one month to the span of one year. These investments have a short locking period or no locking period at all. Short term investments are usually exempted from having tax levied upon them. Some examples of short term investment plans are savings bank account, bank fixed deposits and money market funds.
On the contrary, long term investment plans are those that stretch for a period of one or more years altogether. These plans have a fixed premium to them and have a minimum locking period that may vary from one plan to another. Those who want to invest money and see their money grow to a great extent can go for these types of investment plans. Some of the examples of a long term investment plan are Public Provident Fund (PPF), Mutual Funds, Life Insurance Policies, Equity shares and others.