Have you saved enough for your family?

Life is a beautiful journey that comes along with various important milestones you aspire to achieve for a happy and secured family life. These milestones could be your house, your child’s education and marriage, your retirement plans, business plans etc. However, with the growing inflation rates, improved lifestyle measures, high-end socializing and for getting best of the amenities just dreaming and saving some money in your piggy bank won’t work. For this you need a careful planning and a regular savings approach. A savings plan is a non–participating limited pay endowment assurance plan that allows you to enjoy the benefits of a long term savings plan ensuring that you and your family are free of any financial worries. Savings plan helps individuals secure financial protection and attain their financial goals. The suitability of savings plans vary from person to person, as it depends on factors like budget, age, income sources, needs and wants of an individual.

The article guides you through some of the savings plan that we all require at different stages of life. 

Emergency Savings Plans: This fund is much desperately needed when there are unexpected events, such as car and home appliance repairs and medical expenses etc. It is advisable since it is a small term goal you could use savings accounts to grow your emergency fund.  The good point is that it allows you to withdraw money quickly. One could set a maximum limit for emergency savings. When that limit is crossed, the excesses can be transferred to goal-oriented savings plan.

Retirement Plans: Retirement Plan is investment insurance plan which allows you to save systematically and build up the much needed lump sum to provide yourself a regular income after your retirement. A person pays fixed amount, known as the premium, to the insurance company, over a pre-determined period of time, known as the term of the policy. The premium will be invested by the insurance company in various instruments to earn returns and build a corpus over the term of the policy. The amount paid as premium is also eligible for tax benefits.  

Goal-Oriented Savings Plans: These savings plan are aimed at generating funds for meeting a specific goal, such as the purchase of a car, a house, going for a holiday etc.  Such plans typically involve savings funds in financial instruments such as equities, debt and mutual funds that yield high returns.

Child Savings Plans: As the name suggest it is for the better future of your child. In this highly unpredictable  world it is extremely important that you keep no stone unturned for secured future of your child right from the day he or she arrives. You can opt for growth oriented child plans which are tax free products built for child safety and secured future aspect.

Short-term saving plans usually meet your needs which arrive in a span of one to two years while you work, run a business or earn in any form. These could be setting up a savings account, Certificates of Deposit, Money Market Deposit Accounts, Government Tax-Saving Bonds etc.

However, when you wish to achieve your long-term goals especially thinking about the day your earning machine comes to halt or you perish from this world then the only solution lies is guaranteed Best savings plan. This savings plan enables you to save money for the long term, while receiving the benefits of a life insurance. The assured sum is paid out in addition to bonuses accrued over the years, as a lump sum either when the plan matures or in the event of the death of the insured person.

Pradhan Mantri Suraksha Bima Yojana and Jeevan Jyoti Bima Yojana differences

Pradhan Mantri Suraksha Bima Yojana and Jeevan Jyoti Bima Yojana are social security schemes launched for the common man of India. Both these schemes are insurance scheme. Many people get confused between these insurance schemes as both schemes are more or less similar. So, what is the difference between Pradhan Mantri Suraksha Bima Yojana (PMSBY) and Pradhan Mantri Jeevan Jyoti Bima yojana (PMJJBY)? Why two schemes are required? Let’s try to figure out the differences and similarities between these schemes.

What is Pradhan Mantri Suraksha Bima Yojana?

Pradhan Mantri Suraksha Bima Yojana is accidental death insurance scheme.

Pradhan Mantri Suraksha Bima Yojana is available to the people in the age group from 18 years to 70 years.

Bank account linked to Aadhar Card is mandatory for this insurance scheme.

The Premium of this scheme is 12 Rs/- per year.

Pradhan Mantri Suraksha Bima Yojana provides accidental death risk cover of 2 Lac.

Default term of this insurance scheme is 1 year which can be extended year on year.

What is Pradhan Mantri Jeevan Jyoti Bima Yojana?

Pradhan Mantri Jeevan Jyoti Bima Yojana is low-cost life insurance policy.

Pradhan Mantri Jeevan Jyoti Bima Yojana is available to the people in the age group from 18 years to 50 years.

The Premium of this scheme is 330 Rs/- per year.

Pradhan Mantri Jeevan Jyoti Bima Yojana provides insurance coverage of 2 Lac. 2 Lac will be paid to the nominee in case of natural or accidental death.

Risk coverage can continue up to 55 years.

Aadhar card is required in order subscribe to this scheme.

Premium paid under this scheme is eligible for tax deduction under 80C.

Difference between Pradhan Mantri Suraksha Bima Yojana and Jeevan Jyoti Bima Yojana

Pradhan Mantri Suraksha Bima Yojana

Similarities between Pradhan Mantri Suraksha Bima Yojana and Jeevan Jyoti Bima Yojana

Pradhan Mantri Suraksha Bima Yojana

Conclusion -

Pradhan Mantri Suraksha Bima Yojana (PMSBY) and Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) are very Best Saving Plan insurance available for Indian. Total sum assured offered by these insurance schemes is not sufficient. You can purchase these policies, however, it is recommended to purchase additional term plan along with sufficient risk coverage.

Source : http://moneyexcel.com/12278/pradhan-mantri-suraksha-bima-yojana-jeevan-jyoti-bima-yojana    

A saving plan that suits you

The first step on the road to fabulous wealth is saving. But faced with inflation and escalating living costs, it can be difficult just to make ends meet, much less saving money. So, where should we start?

Work towards a goal

We need a concrete goal if we want to get anywhere, and the same is true for our savings. You could be aiming to save $50,000 within 2 years to tour around Europe, $100,000 within 5 years to cover the cost of your studies, or $150,000 before the age of 30 for your wedding banquet. Having a target and timeline to aim for allows you to calculate how much you need to set aside each month or year as you move ahead. Then it’s simply a matter of finding the best way to work towards that goal, including possibly enrolling in a saving deposit plan at the bank to achieve it.

Save before you spend

Most people live pay cheque to pay cheque, paying bills and making necessary purchases first and then worrying about saving any money that’s left. They often find that there simply is none, or even that they have to spend money saved from previous months to get by. But there is a budget hack that may help!

Try setting aside 10-30% of your monthly income as savings immediately, in a location relatively inaccessible to withdrawals like a bank deposit plan or investment product with low risks and steady returns. That way, when you go to pay bills and adjust your budget you will be working with a smaller sum already – saving money while also tightening your spending!

Compound interest – let your money work for you

Saving is hard when you work hard for every cent. That’s why you need to let your money work for you. The earlier you begin saving your money, the more powerful the effect of compounding is! Make the best of time deposit and savings insurance plans as early as you can! The money growth in your accounts can make budgeting much easier.

Explore income sources and reduce expenses

We only live once, so it’s important to seize the day. An overly strict Best savings plan, however, could limit our chances to see the world. What’s worse is very often when working with a rigid plan, the potential rebound could be going on spending sprees and quickly use up all their savings. In view of this, perhaps we could consider seeking more income sources, such as freelance jobs or online trading, to earn a little more outside the office.

When you draw up your savings plan, you should take into account the financial burden you can bear, and make sure you have enough cash for emergencies. Fresh graduates should also consider the fact that their parents could retire anytime, so they could soon become the bread winner for the whole family.

Source: http://blog.fwd.com.hk/en_US/2015/09/09/saving-plan-suits-you/   

Money Savings and Deposits

The Reasons You Want Insurance Coverage – Top Reasons for getting life Assurance

You unquestionably want to know no matter whether lifestyle insurance policy can be a advantageous financial commitment you aren’t. The fact is it has a lot of rewards in your case and then for your household. Find out the reasons why you want like insurance plan and ways in which it will also help you and your loved ones.

A life insurance policy bushes the ones you love from monetary risks if you happen to perish. If you ever are among the breadwinners inside a household, you will definitely not want to keep all your family with no your wages in the occurrence of passing. This sort of protection will pay out a lump sum payment to your heirs. Countless uses for flash for something. All your family members can use it to spend any loans and lending products, to cover their living expenses for a time and to invest in their education and exercising.

Lasting living insurance cover permits you to not spend as much within your life and provides for funds price expansion. In paying a limited high grade each year or regular towards insurance policy firm. They control your hard earned cash, in order that it can develop. Essentially, this sort of insurance policy coverage can be used for saving while not having to store a considerable slice of you salary.

You’ve got a number of plan solutions available. In addition to Best Savings Plan the permanent insurance plan, you can decide on lasting complete, common and changing worldwide existence insurance policies and also for a term scheme. All of these answers are produced to take care of your personal demands but for the fiscal wants of your family at any point over time.

Having an expression insurance policy, you can find further financial safeguards during times when you have insurance coverage probably the most; say for example a home loan payment term or perhaps a toddler bringing up phase. Which has an adjustable worldwide scheme; you possibly can use some financial commitment options and increase the produced cash price even more.

You should utilize the gathered cash benefit from whole and widespread handles for just about any requirements within your lifetime time. It is possible to take away a slice of it and employ it to protect any vital expenses. It’s also possible to borrow up against the cash importance of your policy. These adaptable selections enable you to take care of your finances more effectively all through your daily life time.

Lifetime insurance policy is affordable. In spite of the common belief, you do not have to cover huge prices around the coverage you obtain. You possibly can easily look around to obtain the best and affordable deal. Moreover, that has a entire permanent scheme, your high grade will likely be preset, settle down! Spending budget will never be harm by imbalances and boosts.

You now know the reason why you require lifestyle insurance and in what way it may help you.

[Source: http://lifeinsurance-blog.net/the-reasons-you-want-insurance-coverage-top-reasons-for-getting-life-assurance/24/]

Top 10 tax Saving Investment Options

Apart from the regular investment options under Section 80C of the income tax act, this year investors have an added advantage of investing in infrastructure bonds and enjoy an additional deduction in tax under section 80CCF of the Income Tax Act.

SECTION 80C DEDUCTIONS: Investment options under Section 80C can be broadly categorised as market linked, fixed income and insurance. The fixed income category includes investment options such as the Public Provident Fund (PPF), Employee Provident Fund (EPF), tax-saving bank fixed deposits, National Savings Certificate (NSC) and senior citizens savings schemes.

While it is the most popular tax saving category, market-linked instruments including tax-saving equity mutual funds (ELSS) and unitlinked insurance plans (ULIPs) are gradually catching up.

PUBLIC PROVIDENT FUND (PPF): One of the oldest investment options, PPF scores on all grounds as it is one of the very few investment options that fall under EEE (exemptexempt-exempt) tax regime.

This implies that not only the investor can enjoy deduction on the amount invested in this scheme but the interest received on maturity is also exempt from tax.

PPF offers an interest rate of 8% compounded annually, with the maximum investment restricted to Rs 70,000 a year and mandatory investment tenure of 15 years.

An investment of Rs 70,000 every year in PPF for 15 years will amount to a taxfree maturity sum of Rs 20.5 lakh at the end of the 15 year tenure.

EMPLOYEE PROVIDENT FUND (EPF): Under the current norms, 12% of the employee’s salary is contributed towards EPF, which is exempt from income tax. Any contribution over and above the 12% limit by the employee towards EPF is consider as voluntary provident fund (VPF) and the same is also exempt from tax, subject to the overall 80C limit of Rs 1 lakh per annum.

Like PPF, EPF, also falls under the EEE tax regime wherein the interest received (on retirement from service) is tax-free in the hands of the investor. The interest payable on EPF is determined each year by the Employee Provident Fund Organisation (EPFO). After having maintained a steady interest rate of 8.5% per annum for quite some time, the EPFO has enhanced the rate of interest to 9.5% for the financial year 2010-11.

While it is still not sure whether such an attractive interest rate will continue in the following years, those who have been contributing to EPF for quite some time now and have accumulated a large corpus are bound to benefit immensely with this year’s higher interest as interest is compounded annually.

NATIONAL SAVINGS CERTIFICATE: Similar to PPF, NSC also earns an interest rate of 8% per annum and investment up to Rs 1 lakh is exempt from tax under section 80C. However, unlike PPF, interest received on NSC, at the time of maturity, is taxable in the hands of the investor which makes it comparatively less attractive.

On the positive note, however, NSC has a relatively shorter lock-in period of just about 6 years and the interest here is compounded halfyearly. Thus, every Rs 100 invested into NSC will grow to Rs 160.10 on maturity.

TAX SAVING BANK FDS: Investment up to Rs 1 lakh in these special tax saving bank fixed deposits also entails an investor tax deduction under Section 80C.

These fixed deposits mandate a lock-in period of five years and interest is compounded quarterly, just like any other ordinary bank fixed deposit.

The drawback is taxability of interest income upon maturity. As most banks are currently offering attractive interest rates, tax-saving bank fixed deposits are currently offering interest rates as high as 8.5% to its investors.

SENIOR CITIZENS SAVING SCHEME: Indian citizens who have attained 60 years of age or those who have attained at least 55 years of age and have opted for voluntary retirement scheme are eligible to invest in senior citizens saving scheme, which offers a fairly attractive interest rate of 9% a year, payable on quarterly basis.

While investment in this scheme is eligible for tax deduction under Section 80C, interest earned shall be taxable in the hands of the investor.

EQUITY LINKED SAVINGS SCHEME (ELSS): These tax saving plans schemes do carry an embedded market risk and calls for investor prudence before making an investment decision. However, their returns are equally rewarding and tax free in the hands of the investor.

As ELSS has a mandatory lock-in period of three years, they are positioned as long-term equity assets and thus returns are tax free in the hands of the investor. And though these schemes mandate a three year lock-in period, investors are likely to be better off if they continue to stay invested for a longer term as equities generate best returns over a longer time frame.

For instance, on an average, ELSS category of funds has returned about 22% compounded (CAGR) returns per annum over the past 10 year period. Some of the better performing schemes in this category include Canara Robeco Equity Tax Saver, Fidelity Tax Advantage and HDFC Tax saver for investors to choose from.

LIFE INSURANCE PREMIUM: Any premium payable by an investor to provide cover to his life is also eligible for deduction under Section 80C, subject to a maximum of Rs 1 lakh. The life insurance policy may be purchased either from LIC or from any other private player in the insurance industry.

Investors should, however, make sure that premium payable is not more than 20% of the sum assured (amount of life cover) in order to avail Section 80C deduction.

UNIT LINKED INSURANCE PLANS (ULIPS): Ulips, or market inked insurance schemes, are also eligible for deduction under Section 80C. As these schemes provide investors the benefit of both life cover and investment in equity and debt markets, these are highly popular with investors.

Investors would, however, do well to check the premiums charged by these schemes before making an investment decision as most Ulips charge high premiums.

SECTION 80CCF DEDUCTION: A new Section 80CCF has been inserted in the Finance Bill 2010-11, which provides an additional deduction of Rs 20,000 to investors for investing in infrastructure bonds issued by notified organizations.

This deduction is over and above the Rs 100,000 deduction available under Section 80C. In the latest tranche, infrastructure bonds offer an attractive interest rate of about 8% to investors with a minimum lock-in period of five years.

[Source: http://webcash.in/2012/06/29/top-10-tax-saving-investment-options/]

Endowment And Insurance Saving Plan

Recently, I have met up with one of my friends for lunch. Over the lunch, he talks about whether do I have financial planning for my future? Well he is not an insurance agent or something like that. I told him that I have just a simple financial planning for myself. I told him about my portfolio whereby 25% of my money goes to stocks and the rest of my money, which is 75% of my money, parked at my OCBC 360 account for the 3.05% interest. 

I was wondering why he asked me this question so in return I asked him back about his financial plan and why he suddenly talked about this topic. He told me that he was told by one of his insurance agent about an investment plus insurance plan where the investment will be invested in secure shares. He didnt told me about what kind of shares that the plan will be invested by I presume that it would be blue chips (Correct me if I am wrong). 

I myself have went to NTUC income to asked more about endowment plan because it is better to diversify my portfolio in this area as well. But when my girlfriend and I went down and hear the agent's explanation, we felt that it is not really that worth it. Okay, not say totally because in the end, you will be able to gain some money out of the 10 or 20 years of "investment". We did see the chart and saw that for more than first half of the investment period, we will be losing money, so in any case whereby we need cash urgently, we will be losing some of our capital. Of course, this is the penalty but would be too harsh if it eats up our capital instead of just forfeiting our interest.

Well, I do not have much understanding about Best Saving Plans yet, but if I am going for one, it will not be for me but will be for my children so that after 20 years, my children will have enough money for his university education without me having to crack my head to pay for it. After that he/she will be on his/her own (after graduation).

So what is your view on these two plans? Will you be going for it?

[Source: http://jyklmoneyblog.blogspot.in/2015/04/endowment-and-insurance-saving-plan.html]