Money is not every thing but money is next to every thing.Only saving
money will not make you richer. So one need to invest your hard earned
money to earn more money. Two steps are involved in financial planning
one is to invest money and other to save tax on earned money.
You may also like to get high returns on your savings.
Fixed Deposit:
Indians invest money in Fixed Deposits to take tax exemption benefits under 80L. One can invest upto 1 lakh for minimum of 5 years to get an interest upto 9.5%. Investment amount and tenure is not limited if you do not want to avail tax rebet. Loan facility is also available on deposited money which is upto 95%. 10 Best ways to Save Money in Modern Life
National Saving Certificate:
You can invest in post office through NSC with minimum amount of Rs. 800 upto unlimited amount. Saving upto 5 year and 1 lakh in NSC is tax free in India under 80C.8% tax is compounded twice in a year.
Public Provident Fund:
Disadvantages of FD is that if amount is above 1 lakh then interest earned is taxable. Here is the solution, PPF. Inerest earned in PPF is tax exempted under 80C. Invested are fixed deposited for 15 years. Individuals can deposit money in small investment.
What is PPF, How to open Public Provident Fund in India 2014?
You can also invest in Gold and Lands but wisely and carefully as lot of fraudulent cases are getting into light in reality business now a days.Other forms of investments like Insurance, MIS, Mutual Funds, Stocks, SIPs, ULIP may pay more than conventional investments but are more risk prone.
But, more risks sometime pays more.
Life Insurance Plans:
Premium paid upto 70 thousand is tax exempted under section 88. One need to be careful while taking any insurance policy. You need to look for lock-in period, high returns, longer and higher coverage. If you want high coverage and no returns then you can go term plans.
Conventionally in india people invest for tax saving but eventually end up with saving for future. Conventionally people invest in RD-Recurring Deposit, FD-fixed Deposit, PF-Provident Funds, PPF-Public Provident Funds, NSC and Insurance. If one can afford some risks then Mutual Funds, Stocks, SIPs , MIS and ULIP may return you more over the longer period of time.
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