Why You Should Invest Instead Of Keeping Your Money In Your Savings Account

Needless to say, as Indians, we strongly believe in the power of savings. Due to the traditional habits of accumulation of funds in our savings account, we tend to ignore the smart benefits of investment. While savings means letting your money sit safely in your lockers, investment promises the growth of your money over the due course. Investing money in the right plan or policy not only ensures the security of your family as well as your participation in the equity markets.

If you’re wondering why you should invest instead of keeping your money in your savings account, go through the following benefits of investments. Take a look:

What is the significance of different types of investment plans?

The process of utilizing your money or capital with the prime aim of growth is considered as investing money. When you opt for investment, the invested amount has a good probability of generating a safe as well as an acceptable rate of returns over the due course of time. Additionally, these investments are backed by a margin of safety in the form of assets or the investor’s earnings.

In order to make use of your invested money to the fullest, it is important to select the right type of investment policy based on your needs. The right type of investment policy helps the investors to reap maximum benefits for himself as well as his entire family. Before investing in any policy, it is quintessential to compare multiple policies in order to understand its features and benefits provided by the insurance companies.

What are the benefits of the investment plans?

  1. Generation of wealth

The prime reason why a majority of investors prefer investments over savings is because of the scope of the creation of wealth. The best way to ensure that your money grows over the due course is by staying invested in the policy for a longer duration of time. Therefore, opt for an investment policy with a longer lock-in period of 3-5 years.

  1. Provision of life cover

There are certain policies that are a combination of investment as well as insurance. These dual benefits of investment mean the provision of life coverage in order to financially secure the investor and his family in times of need. For instance, a ULIP policy provides the nominees of the policyholder with the sum assured on the death of the policyholder.

  1. Exemptions of taxes

Any policy under Section 80C of the Income Tax Act, 1961 exempts the payment of taxes. The premium paid towards the policies like ULIPs and ELSS deducts up to Rs.1,50,000 from the taxable income. These tax benefits ensure that the policyholder saves more money in order to meet his financial goals.

  1. Security in the retirement phase

The best part about opting for investment plans is that it provides the right amount of security in order to help you survive the most crucial stage of your life i.e. the retirement. Investment in the best ULIP ensures that you have cash flow when you don’t have any steady flow of income. Hence, see to it that you invest early for the generation of a larger emergency fund in order to combat retirement peacefully.

Now that you know why you should invest instead of keeping your money in your savings account, what are you waiting for? Before purchasing an investment plan, compare multiple policies in order to make sure that you land up with the best deal at an affordable rate. Comparing helps to understand the product offerings provided by different companies. In the end, investing money in the right policy helps to generate larger funds and gains.

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