Investments are essential since simply earning money is no longer sufficient in today’s environment. You put forth a lot of effort to earn your money. However, that may not be enough for you to live comfortably or achieve your dreams and objectives.
Most investors want to make investments that will provide them with significant returns as fast as possible while eliminating the danger of losing their principal money. This is why so many people are on the search for great investment plans that will allow them to quadruple their money in a matter of months or years while posing little or no risk.
What Are Investment Plans?
An investment plan is a financial solution that enables the policyholder to invest in a systematic manner for building long-term wealth as well as achieving financial goals. Depending on the type of plan chosen for investment, an investor can earn guaranteed returns, market-linked returns, or a combination of both by investing in these plans. Simply put, an investment plan is one of the most effective and convenient approaches to accumulate wealth over time.
Importance Of Investment Plans
Investment plans are important because of the following reasons:
- Generating Wealth: Investment plans allow you to build wealth over time by making consistent and disciplined investments. Investing in the right option not only assists you in multiplying your savings but your wealth too. As an investor, you can select from a variety of investment options based on your risk tolerance, expected returns, and investment amount.
- Protect Your Loved Ones: Investment plans play a critical part in the financial protection of your loved ones. In the event that any unfortunate happens to the life assured, his or her family will receive the sum for which they were insured, as well as the fund value. The family will be able to meet their needs and financial goals with these returns.
- Investment Amount & Tenure Flexibility: When it comes to the amount of money to invest as well as the duration to invest, you have the option of being flexible based on your objectives and timelines. You have the option to choose the investment tenure in investment plans based on your personal requirements. You can choose a short-term investment option if you just wish to invest for a short time. Similarly, if you want to invest for a longer period of time, you can select a multi-year investment option.
- Savings For Retirement: You can put your money into some of the investment options to build a corpus that will provide you with income once you retire. As a result, you, as an investor, will not have to rely on anybody else after you retire. You can be financially self-sufficient since you have funds accumulated from prior years.
- Tax Benefits: Under Sections 80C and 10 D(D) of the Indian Income Tax Act 1961, investment plans also provide significant tax savings. Under both sections, both the premiums paid and the insurance payouts are tax-deductible and tax exempted. As a result, investment plans not only assist you in saving or multiplying your money but also provide additional financial security in the form of tax benefits.
Types Of Investment Plans In India
Different investment plans are broadly categorized into three groups based on the accompanying risk, as shown below:
1. Low-Risk Investment Plans
Low-risk investment plans are ones with a risk level that is close to zero. In other words, low-risk investment plans are more likely to produce consistent and predictable value growth with minimum losses. The following is a list of some of the best low-risk investment options to explore.
- Senior Citizen Savings Scheme
- Public Provident Fund
- Pradhan Mantri Vaya Vandan Yojana
- Sukanya Samridhi Yojana
- National Pension Scheme
- Bank Fixed Deposits
- Sovereign Gold Bonds
2. High-Risk Investment Plans
Investors who are looking for long-term capital growth can consider high-risk investment plans. Meanwhile, most high-risk investment plans are prone to big volatility, but also provide the potential for significant long-term gains. The following are some examples of high-risk investment plans:
- Direct Equity
- Equity Mutual Funds
- Debt Mutual Funds
- Unit Linked Investment Plans (ULIPs)
3. Medium Risk Investment Plans
Investment plans that are diversified or balanced are classified as medium or moderate risk investments. Investment plans with a moderate risk profile offer both the possibility for growth and the willingness to accept some market volatility. The following are some examples of medium-risk investment plans:
- Hybrid Debt-Oriented Funds
- Arbitrage Funds
- Monthly Income Plans
Some Top Investment Options In India
When it comes to some of the top investment options in India, the following investment options dominate the market:
ULIPs are life insurance policies with the option of investing your money in a variety of money-market linked assets based on your objectives. They also provide you the choice of moving your money between high, medium, and low risk. The remaining component of the premium is utilized to offer much-needed insurance coverage, while a portion of the payment is assigned to a number of fund options (depending on your investment objectives and risk profile).
2. Public Provident Fund (PPF)
PPF is one of India’s most popular small-savings programmes, and it’s long been considered one of the greatest and safest investing options. PPF account holders can invest up to Rs 1.5 lakh in a financial year, with a minimum investment of Rs 500. Deposits can be made in a single lump sum or in 12 instalments.
3. Mutual Funds
A mutual fund is a type of investment tool in which a group of participants combines their money in order to obtain a return on their investment over time. A professional investor known as a fund manager or portfolio manager oversees this pool of funds. In order to optimise profits, he or she must invest the funds in various securities such as bonds, stocks, gold, and other assets. The gains (or losses) of the fund are distributed to investors in proportion to their contributions.
4. Monthly Income Plan (MIP)
A Monthly Income Plan (MIP) is a mutual fund strategy that primarily invests in debt and equity securities with the goal of generating cash flows while preserving capital. A MIP is designed to generate a consistent income stream in the form of dividends and interest payments.
5. Sukanya Samridhi Yojana
Sukanya Samriddhi Yojana is gaining traction as one of India’s top investment schemes for girls. If you have a daughter, this plan attempts to make corpus formation easier for her. In addition, under Section 80C of the Income Tax Act of 1961, you can save a lot of money on taxes.
6. Senior Citizen Savings Scheme (SCSS)
Senior Citizen Savings Scheme (SCSS) is a retirement benefit program backed by the government of India. Senior citizens in India can invest a lump sum, either individually or collectively, in the scheme and receive a regular income as well as tax benefits.
Top Investment Plans By Insurance Companies In India
Choosing the best investment plan might be difficult for you, especially when there is a multitude of options available in the market. Therefore, we have made a list of the top 5 investment plans that you can consider buying.
1. HDFC Life Sanchay Plus
HDFC Life Sanchay Plus is a non-participating, non-linked savings insurance plan that provides you and your family with assured returns. While this insurance policy assists you in leaving a legacy, its income options allow you to plan for important life events such as a child’s schooling or a wedding. In a nutshell, it ensures the family’s financial security and assists you in creating a legacy for them.
- Under the plan, you get a life cover in order to protect the future of your family.
- With the help of the “Lifelong Income” option of the plan, you get a steady retirement income.
- In order to enhance your protection coverage, you can get optional riders under the plan on payment of an additional premium.
- As per the prevailing tax laws, the plan also provides tax benefits to the policyholder.
|Entry Age||5 To 60 Years|
|Age At Maturity||18 To 80 Years|
|Minimum Instalment Premium|
Annual: ₹30,000, Half Yearly: ₹ 15,000
Quarterly: ₹ 7,500, Monthly: ₹ 2,500
|Maximum Instalment Premium||No Limit|
10 To 20 Years, 12 To 20 Years
7 To 12 Years, 8 To 13 Years, 9 To 14 Years
10 To 15 Years, 11 To 16 Years, 12 To 17 Years
Long Term Income
5 To 10 Years, 6 To 11 Years, 7 To 10 Years, 8 To 11 Years
9 To 11 Years, 10 To 12 Years, 11 & 12 Years, 12 & 13 Years
2. Bajaj Allianz Fortune Gain
Bajaj Allianz Fortune Gain is a non-participating, single premium unit-linked endowment plan for individuals. The plan allows for a premium allocation of up to 99.5 percent, ensuring that your hard-earned money is put to the best possible use.
- The policyholder can choose from seven investment funds based on their risk appetite.
- The plan also includes a systematic switching Option.
- At the policyholder’s decision, the sum assured can be reduced.
- The plan also provides the option to take maturity benefits in installments.
|Minimum Entry Age||1 Year|
|Maximum Entry Age||63 Years|
|Age At Maturity||18 To 70 Years|
|Policy Term||7 To 30 Years|
|Minimum Sum Assured||1.25 X Single Premium|
|Maximum Sum Assured||X Times Single Premium (where X is based on age at entry and policy term)|
3. ICICI PruLife Gift Plan
The ICICI PruLife Gift plan is a new goal-based savings plan from ICICI Prudential Life Insurance that offers policyholders a guaranteed income to help them meet their long-term financial goals. GIFT is a life insurance plan that prioritizes safety and savings while also delivering guaranteed rewards to help people achieve their goals.
- Benefits are assured in either a lump amount or a monthly payment form.
- You have the option of getting guaranteed income beginning in the second year.
- Under current tax rules, tax advantages are provided on premiums paid and benefits received.
- You may be able to get loans against your insurance policy.
|Minimum Entry Age||18 Minus Policy Term|
|Maximum Entry Age||60 Years|
|Policy Term||6 To 20 Years|
|Premium Payment Frequency||Single Pay, Annual, Half-Yearly, Monthly|
4. Canara HSBC Life Invest 4G Plan
The Canara HSBC Life Invest 4G plan is a unit-linked individual life insurance savings plan that you can customize to your specific goals and needs. This plan gives you complete control over your savings and insurance needs, thanks to an unrivaled combination of portfolio management options and flexibility.
- The plan provides a bouquet of 8 funds from which the policyholder can choose.
- The policyholder has the option of paying for the whole policy term, a specific number of years, or simply once.
- The policy comes with three different levels of coverage to accommodate different stages of life.
- Multiple portfolio management options are available in the policy, allowing you to optimize the policy’s returns based on your investment preferences.
Life Option: 0 To 65 Years
Care Option: 18 To 50 Years
Century Option: 18 To 65 Years
Life Option: 18 To 80 Years
Care Option: 28 To 80 Years
Century Option: Up Till Age 100 Years
For Single Premium: 1.25 Or 10 X Single Premium Basis Age At Entry
For Regular/Limited Premium: 10 X Annualized Premium
For Regular/Limited Premium: 10 X Annualized Premium
5. SBI e-Wealth Investment Plan
The SBI Life eWealth Insurance Plan is an online unit-linked insurance plan that was created to provide insurance protection as well as market-linked rewards. As a result, the plan assists the policyholder in both securing his insurance needs and increasing his wealth through attractive returns.
- The plan is available in two varieties: “Growth” and “Balanced,” to accommodate policyholders with varying risk profiles.
- The plan has a feature called “Automatic Asset Allocation,” which manages the policyholder’s investments automatically to maximize returns.
- There are no premium allocation fees, therefore the fund’s value rises.
- The premium for the plan starts as low as Rs. 2000 per month.
|Entry Age||5 To 50 Years|
|Maximum Maturity Age||60 Years|
|Policy Term||10 To 30 Years|
|Basic Sum Assured||10 X Annualized Premium|
What Are Things You Need To Consider While Choosing The Investment Plan?
While choosing an investment plan, you need to take into account the following factors:
- Your Current Expenses
In order to find the finest investment plan, you must first evaluate your current expenses. If you don’t have any substantial costs, such as a mortgage, you can save or invest more for the future. If you have financial obligations that prevent you from saving much, however, investing in a high-return investment plan will be more helpful.
- Your Financial Goals
Your financial goals, both long-term and short-term, are one of the most significant factors to consider when selecting an investment plan. These goals might range from marriage and school to international travel and new smartphones, and keeping track of them can help you make the best financial decisions possible.
- Financial Dependence
You should also consider your financial dependence when purchasing an investment plan. This is because you must have an investment or savings pool large enough to meet the financial needs of your dependents. For example, if you just have two children who are financially dependent on you, you may not need to invest as much as someone who needs to care for their parents, siblings, and children.
- Examine Policy Term
You should also consider the duration you want to invest, taking into account a variety of elements such as present liabilities, the number of dependents, and so on.
- Compare & Analyse
Before investing in an investment plan, compare its many aspects, such as coverage, riders, premium, payment type, and returns.
- Future Expenses
If you’re looking for an investing plan, determining your anticipated future expenses, such as your child’s marriage and education, or purchasing a property, is critical. This will give you a better understanding of how much you need to invest now in order to generate enough returns later to cover any upcoming expenses.
How Does An Investment Plan Work?
Investment plans function by generating revenue and building a corpus over time. The investment options may include bonds, fixed deposits, provident funds, stocks, and other assets that can significantly expand savings and serve as an additional source of income under an investment plan.
It assists you in averaging out your investment costs and reaping the benefits of compounding. The force of compounding works best when you stay invested for a long time, allowing your money to earn money over time.
How To Buy Investment Plans Online?
In order to buy investment plans online, you need to visit the official website of the respective company. The company’s website will direct you towards the buying process and display all the essential details of the plan along with premium details. Once you pay for the investment plan and purchase it, all of your policy details will be sent to your registered mail address and phone number. Please keep in mind that before purchasing any investment plan, you will be needed to complete the KYC, for which you should have all of your necessary documents on hand.
Documents Required To Purchase Investment Plans
Following are the general documents required to buy an investment plan:
- Age proof, such as birth certificate, 10th or 12th mark sheet, etc.
- Identity proof, such as driving license, passport, voter ID card, etc.
- Income proof
- Address proof, such as electricity bill, telephone bill, etc.
Frequently Asked Questions
To earn higher returns and limit risks, you may choose to diversify your investments or focus on asset allocation.
Equities and large-cap mutual funds are two investing options in India that have the potential for high returns. However, before participating in these investment plans, you should talk with your financial advisor and seek their assistance in investing and managing your investment portfolio.
You have the option of making partial or systematic withdrawals from your investment accounts. You can also seek a lump-sum withdrawal based on your needs by submitting a redemption request.
The minimum withdrawal amounts for most investment plans are set in their disclosure forms. As a result, you can withdraw a certain amount from your investments on a regular basis.
Gold, according to experts, should be an essential part of your diverse investment portfolio because its price rises when the value of paper investments such as bonds and stocks falls. While gold prices are occasionally unpredictable in the short term, they have always retained their value over time.
There is no set age at which one should begin investing their earnings in order to build a savings account. It is recommended that you begin investing your money in various investment alternatives as soon as you begin earning at a young age. You will have more time to construct a larger corpus as a result of this.