Savings refers to the part of the money which is not spent on consumption. Protection means depositing cash in a safe place. Savings completely depend on earnings, and savings is useful to meet our short-term needs and emergency periods. There are two types of savings plan – Private savings and Public savings.
Why do people believe in savings?
- For future security
- To buy future needs
- To have money available for unexpected circumstances.
- To save money for old age
Factor affecting the level of savings –
- Financial independence
- Social status
- Business purposes
- Earning level
- Earning source
- Number of sources for earning
Here we discuss private saving or saving plans and how does it work?
With the help of a saving plan, one can grow in their savings. Saving plans are designed to assist in saving money continually. In a savings plan, one has to pay a certain amount for a particular part of the time.
With a reliable savings plan, one can fulfill their dreams. The plan holder gets a guaranteed lump sum benefit in a savings plan. Saving plan assured guaranteed return.
Features of Savings Plan
Investment cum Protection: Savings plan give safe protection to your assets, and with safety one also get good growth in savings. Your family will feel financial independence in the time of emergency. In terms of investment, plan holders get vested compound reversionary and terminal bonuses.
- Life cover – Almost every savings plan provide life cover to policyholder. This facility will care for your family after your unfortunate death, and one gets life cover for the entire policy term.
- Less expensive – Savings plan is less expensive. Family depending on salary can easily purchase in monthly, yearly, quarterly premium paying as per comfort. If you wish to purchase a new car in the next 10 years, then one can save enough funds for the car by investing in a savings plan.
- Easy to buy – We can purchase savings plans online or offline. We can compare all available savings plans online with the help of multiple advisory websites. You can purchase policies by filling in some information required for purchase on the site you are visiting.
Benefits of savings plans
Different savings plans come with different types of features. Here are some key benefits of having a savings plan –
Tax saving – This is the ultimate benefit of having a savings plan. You can save tax under section 80C of the Income Tax Act. While some plans offer tax-free maturity processing under the section 10D of the Income Tax Act.
Retirement benefits – By investing a small amount regularly during your service tenure, you can make a sizeable amount that can be used to generate a pension. This will remove all of your financial problems in old age that is the most important thing.
- Receive guarantee income after premium payment term.
- Enhance your protection with position riders.
Some savings plan offers you a partial withdrawal facility which can be beneficial in emergency.
And there are many more benefits of a savings plan, and it depends on which one you have chosen.