In this day and age financial planning isn’t just about receiving a salary or business profits. You need investment plans and nest eggs to fall back on when things turn awry. The unpredictability of life calls for stronger financial approaches, which is why one of the primary sources of income is savings plans. However, they don’t need to be money in a bank. Now, you can have savings plans that secure your future as well as that of your family.
Savings plans for the new age
Having life insurance guarantees that if an unspeakable misfortune befalls you, the future of your loved ones is financially secured. You can diversify your investments in life insurance by choosing a plan that provides financial security as well as helps reach personal goals. So, here are some savings plans that can work wonders to elevate your financials:
- Endowment plans –
These are life insurance policies that allow you to choose the sum insured to help secure your family’s well-being after your demise and provide a bonus program. Endowment plans are essentially savings plans if you survive the tenure of your policy. Not only do you receive maturity benefits, but you also obtain bonuses if you are a participating member. If you are a non-participating individual, you will still receive the maturity benefit, which is a lump sum amount of money obtained to help you with financial planning. - Money-back plans –
These life insurance plans have special benefits. When you invest in money-back plans, you receive a predefined sum of money after regular intervals from the premiums that you invested. These lump sum amounts of cash can help out in critical financial situations. In the event of your demise during the policy plan, your beneficiaries will still receive the entire sum assured as a death benefit. - ULIPs –
Unit Linked Insurance Plans are policies that help you invest in the market and earn profits in the form of bonuses during the tenure of your insurance plan. They also provide death benefits in the event of your unfortunate demise to your beneficiaries. - Retirement Plans –
These are Pension plans that pay a lump sum amount upon maturity or pay you monthly allowances based on your investments in your golden years. - Sukanya Samriddhi Yojna Plans –
These are savings plans that target to help female children achieve their life goals. As parents, you need to invest in the SSY plans. Upon maturity, the girl child receives the sum assured to help pay for their education, wedding, business plans, etc. as per their requirements. - Public Provident Funds – These are government schemes that act as savings plans, providing you with guaranteed income from long-term investments.
- Employee Provident Fund –
If you are a salaried individual, you can invest in EPFs that provide savings plans which pay you guaranteed returns after a defined period of time.
- National Savings Certificates –
These are savings plans that you can acquire at the post office near you. All you have to do is invest a fixed amount of money in the NSC scheme. Over time, your money compounds and provides guaranteed returns.
- Fixed Deposits –
Investing in FDs is the safest savings plan. You need to invest a lump sum amount of money in an FD. You must lock in the investment for a specified period of time. The FD generates interest at a predefined rate and upon maturity, you will receive a compounded sum of interest along with your investment.
When choosing the best savings plans to reach your financial goals and secure your family’s future, the options can seem daunting. That’s where the power of compounding calculators comes into play. These online financial instruments help you estimate the amount of investments that you need to reach a financial goal.
How to use the power of a compounding calculator?
The power of compounding calculators extends far beyond the usual manual calculations. You will need to input the following details to acquire an accurate estimation:
- How much money would you like to invest?
- The frequency with which you would like to invest, i.e., monthly, yearly, quarter, bi-annually, or as a one-time investment.
- The number of years for which you would like to continue investing.
- The period for which you would like to stay invested, i.e., the number of years after which you would like to withdraw the entire sum or receive the payouts.
- The percentage of profits you intend to make out of your investments.
Based on the factors listed above, the compounding calculator helps you determine realistic financial goals and how to reach them. You can use the power of compounding calculators to modify the variables and reach a suitable financial goal.
Conclusion
The power of compounding calculators can help you compare savings plans and choose the ones that work best in your personal circumstances. One glove does not fit all, so you can use the power of the compounding calculator to diversify your investments in suitable schemes, be it government savings plans, life insurance policies with a component of a savings plan, or personal savings plans that greatly benefit you.
