5 Reasons Why you Need to Buy Savings Plan in 2020

Let us look at 5 benefits that can convince you to invest in a long-term savings plan.

Benefits of buying a savings plan in 2020

1. Guaranteed Returns
   Saving schemes insulate you from market volatilities. Investment in the market usually comes with certain risks, especially on the return. In normal circumstances, one might have a chance of earning high returns by taking well-calculated risks. it may be  better to avoid all market-related risks. Moreover, it is also often recommended to steer away from market risks if you are hoping for fixed returns and don’t want to participate in the risks associated with market. Hence, if you are one looking for a guaranteed return on your investments, it is advisable that savings plans are your only feasible options.
   
2. Tax Benefits
   The payment of taxes is a mandatory cost that one has to bear on all forms of earnings. There are some tax deduction incentives provided by the government. But not all investment plans have the option of you getting income tax benefits. Fortunately, investment in savings plans offers your tax-saving opportunities of up to ₹1.5 lakhs under Section 80C of the Income Tax Act, 1960.
   
3. Long-Term benefits
   Planning for long-term financial decisions such as your child’s marriage or education or retirement can be very tricky. You need to make sure the value of money saved does not decrease over the period due to inflation. This can be done by taking advantage of the compound interest concept that is used to calculate the interest rate on most savings plans. Here, the value of money gets adjusted to the inflation and other factors that might depreciate the present the sum of money. Furthermore, these schemes also have a lock-in period, which prevents you from withdrawing it, thereby allowing the full effect of compounding.
   
4. Financial Security & Death Benefit
   The safety and security of your money is always a concern, especially when you hand it over to others for safe-keeping. People usually prefer having liquid money, but it must be understood that having the same does not guarantee safety. Moreover, as already discussed, the market risks are minimised, and this is not just in returns, but also sum invested. This also provides you with financial security as it can prove to be a safety net in case of any unwanted eventuality.
   The saving insurance schemes  serve as life insurance plan for you in order to mitigate the risk of unfortunate life events. When covered under such schemes, your family is entitled to a sum assured in case of your demise. However, before buying a savings plan, you need to check the amount that your family will be provided as it may differ from one insurance company to another.
   
5. Inculcating a Saving Habit
   Not everyone inherits a saving habit or develops a new one out of the blue. Developing a habit starts with practice and what better way than to pay regular premiums for your saving plans. This regular premium payment compels you to reduce your unwanted expenses and accordingly helps you to make the best use of the money at hand.
   

Conclusion
Savings plans can be greatly beneficial and hassle-free. Moreover, there is no need to track the market regularly to check if your investment is making any profits or not. So, people who want minimal risk and complications opt for a savings plan. However, with a myriad of saving plans from various financial institutions, the best way to choose a suitable plan is to have a thorough study of the policy document. Nonetheless, if you still are in doubt, contact the customer support of your financial institution for more details on their savings plans.

To know more about term plan, term insurance, long term savings & retirement plan visit PNB MetLife website.