The All-India Aspiration Index has seen a remarkable rise to its highest point, reaching an impressive 87.3 since its inception in 2018. This figure is a significant jump from its lowest point of 79.9 during the pandemic year of 2020 and an even more impressive climb from 84.4 in 2021. This surge in the Index indicates that Indians are increasingly ambitious and committed to achieving their goals and aspirations, especially when it comes to upward social mobility. Finances are seen as a key factor for success, as it grants individuals the resources necessary to make their dreams a reality.
Dreams are something that everyone around the world strives to achieve in life. However, many of us think it is impossible to make enough money to realise these dreams and eventually give up on them. It is true that wealth cannot be created overnight, but it is still possible to accumulate wealth over time if you are diligent and disciplined when it comes to making investments. As you plan out your route and itinerary when you go on a long trip, you should create a plan or goal that outlines how and where your money will be invested, as well as a timeline and goals for achieving those investments.
Goals are an essential part of life and can be classified into two main types: short-term and long-term. Short-term goals are those that can be accomplished within a timeline of 5 years or less. These could be things like home renovations, investing in property, or buying a car. Long-term goals are those that require more than 5 years to achieve, such as providing education for your children, marriage, ensuring financial security in old age, etc. After setting a goal, the next step is to research the different investment options available. By exploring the different financial markets, you can choose the best investments that will help you to achieve your desired outcome. With a consistent and dedicated approach to investing, you can turn your dreams into reality. There are different financial products that you can invest in, which we will cover in this article.
Not all financial products are suitable for all goals. You need to select financial products which are suitable for your goals. Simple but powerful financial products you can use are :
The Public Provident Fund (PPF) was launched in India in 1968 by the National Savings Institute of the Ministry of Finance to encourage small-scale savings and investment. It is a great way for individuals to save for retirement and minimise their tax bills. As an investment option, PPF provides a safe and secure environment with guaranteed returns, making it an ideal choice for those looking to save money and reduce their tax burden. With its long history of success and numerous benefits, PPF is an excellent choice if you are looking for a reliable and tax-efficient savings plan.
Finance Minister Smt. Nirmala Sitharaman announced the Mahila Samman Saving Certificate in the 2023-24 Budget Speech to commemorate the Azadi ka Amrit Mahotsav. This one-time investment allows women and unmarried girls to deposit up to a maximum of 2 lakh rupees. The amount can be withdrawn after two years, but you can opt for the partial withdrawal facility in case of premature withdrawal. From April 2023, eligible girls and women can take advantage of this scheme until March 2025.
The Sukanya Samriddhi Yojana is a government savings scheme designed with the intention to benefit girl children under the initiative called “Beti Bachao – Beti Padhao”. The parent or guardian of the girl child who is 10 years of age or younger can open an account under this scheme. This scheme carries a higher interest rate along with several tax benefits.
The National Pension System (NPS) is a voluntary, defined contribution retirement savings scheme designed to equip citizens with the ability to make informed decisions about their futures. It provides a safe platform for systematic savings throughout life, encourages the habit of retirement savings, and offers a sustainable solution to the challenge of ensuring an adequate income in retirement. Investment options include Government Bonds, Bills, Corporate Debentures, and Shares, which are managed by PFRDA-regulated fund managers. The return on investment determines the growth of accumulated pension wealth over time. Upon retirement, subscribers can opt to purchase a life annuity from an empanelled Life Insurance Company or withdraw part of the accumulated pension wealth as a lump sum.
The Senior Citizen Savings Scheme (SCSS) is a government-backed savings instrument designed to provide senior citizens with a reliable and secure source of income after retirement. Launched in 2004 by the Government of India, it is one of the most attractive savings schemes in India, offering a substantial rate of return and minimal risk of capital loss. Finance Minister Nirmala Sitharaman has announced in the Union Budget 2023 that from 1 April 2023, the senior citizens saving scheme will be extended for a deposit account of ₹30 lakhs from ₹15 lakhs.
Sovereign Gold Bonds are a form of gold investment issued by the Reserve Bank of India on behalf of the Government of India. They are designed to be an attractive alternative to physical gold investment, as they provide an assured return and open up an additional asset for investors. The Bonds are denominated in multiples of 1 gram of gold and have a tenor of 8 years with exit options in the 5th, 6th and 7th year. If you are seeking an efficient and convenient way to invest in gold, Sovereign Gold Bonds are a perfect option as there are no making charges and you will receive the full value upon selling.
Fixed Deposit, also known as FD, is one of the commonly availed investment options in India. It offers higher interest rates than a savings account. FD can have a tenure ranging from 7 days to 10 years. It is often used to save for various short, medium and long-term financial goals. Auto sweep is a feature that connects your savings account to a fixed deposit account, allowing you to earn higher returns on the excess or idle money in your savings account. The auto sweep feature, as the name implies, “sweeps” excess funds from savings into a fixed deposit account. You must connect these two accounts and establish a monetary limit.
When the balance in your savings account exceeds this limit, the auto sweep feature kicks in. The amount over the limit is immediately transferred to the fixed deposit account. With this feature, the average interest rate on your idle money grows faster than the interest rate on your savings account. So while a normal savings bank account gives a 3.5% return, all the money above the threshold limit in an auto-sweep bank account earns an 8-9% return.
Buying a property in a woman’s name can offer numerous advantages, such as tax benefits (According to the Income Tax Act, women are eligible for certain tax exemptions when they own property), a reduced stamp duty of up to 2% and easier resolution of succession issues. Furthermore, it can help the woman to get a loan from banks, NBFCs and other financial institutions at favourable terms and schemes, with lower interest rates and higher loan amounts. Thus, owning a property in a woman’s name can prove to be beneficial in the long run.
If you want to invest in the share market, invest in mutual funds, as it is a great way to invest your money. Mutual funds provide diversification, as investors can spread their money across a mix of investments such as stocks and bonds. They are managed by professionals, so investors don’t have to worry about researching individual stocks and bonds. Mutual funds are also cost-effective and offer the potential for growth. They also offer liquidity, making it easy to access funds when needed. Furthermore, mutual funds can help investors reach their financial goals while managing risk. Various Mutual Funds offer varying degrees of risks and returns, and some are more market reliant than others.
There are more than 2500 different mutual fund schemes available. However, given below are the golden rules that can help you choose the right one from it.
If your mutual fund scheme is associated with a bank, they provide more stability to your fund. Some good equity mutual funds you can opt for are SBI Bluechip Fund – Growth, ICICI Prudential Bluechip Fund – Growth, Kotak Bluechip Fund – Reg – Growth, and HDFC Top 100 Fund – Growth.
Term Life Insurance is essential as it helps prevent your savings and investments from drowning due to an emergency. Generally, the life insurance policy that we buy (for instance, LIC policies) provides life cover of only 10 times the annual premium. So, if you are paying an annual premium of Rs. 5000, the life cover will be only Rs. 50,000. This is not a sufficient life cover. On the other hand, Term Life Insurance provides life cover of 500 times the annual premium. So, if you pay a premium of Rs. 5000 in a year, you can get life cover of Rs. 25 lakhs. There are only 2 types of Term Life Insurance Schemes offered by the Government of India. They are:
Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) is a government-backed life insurance scheme in India. It provides an annual life insurance cover of Rs 2 lakh to individuals between 18 and 50 years of age who have a savings bank account and are willing to pay a nominal premium of Rs 500 per year. The scheme is available through public sector banks, private sector banks, cooperative banks and regional rural banks. The scheme is renewable from year to year and provides a comprehensive life cover on a family floater basis.
Ayushman Bharat, also known as Pradhan Mantri Jan Arogya Yojana (PM-JAY), is a health insurance scheme initiated by the Government of India in 2018. It is the world’s largest government-funded health insurance programme and aims to provide health coverage of up to Rs 5 lakh per family annually. The scheme covers up to 3 days of pre-hospitalisation and 15 days of post-hospitalisation expenses and also covers a range of treatments, including surgery, diagnostics and medicines. There are no restrictions on family size, age or gender. All pre-existing conditions are covered from day 1. In addition, you can avail cashless benefits at any public/private empanelled hospital across the country.
Investments are an important part of financial planning and can be beneficial for many reasons. They can help you build a financial safety net, reach financial goals, and provide financial stability. They also help diversify your portfolios, reduce risk, and increase potential returns. Investing can also help you to build a retirement fund, ensure future financial security, and increase an individual net worth. Investing in stocks, bonds, mutual funds, and other financial instruments can also allow you to participate in the economy’s growth and benefit from the potential of capital appreciation. Investments can also help you to save for your kid’s studies, build a home, or make other large purchases. Therefore, Investing can be a great way to build wealth, generate income, and pursue financial goals.
Visit your bank and ask about investing in mutual funds. You will need to do a one-time KYC and then you can start investing. If you already have mutual fund KYC you can also invest using online apps.
Bank account holders between the age of 18-50 can avail this scheme.
No, you can visit any empanelled public or private hospitals in India to avail cashless treatment.
