Where Should I Invest To Save Taxes & Achieve Financial Goals

Money is the way of life, while many may disagree with the fact, but it is the harsh truth of this century. No matter what you do, how you work, at the end of the day, you want to ensure that you have enough money to do what you want.

Achieving the financial goals that you set for yourself to have a secure future many-times seem gloom. So, you look for options that can help you in saving your money. Be it reducing your expenses, investing in various options or finding income tax saving options, everything you do is to save money to achieve your financial goals.

While investing in different income tax saving options is a good idea, you may face complications in choosing the right one. Quality investments that provide good returns require a methodical and disciplined approach.

Top 5 Best Investments for Achieving Your Goals (& Save Tax)

The evaluation of various funds, their benefits, their requirements and their suitability to your pockets are some factors that must be considered before investing.

So, here is a list of investments that can help in reaching your financial goals by providing good returns and value for your money:

ULIP Investments

ULIP is an investment option that facilitates investments in bonds and equities while offering protection simultaneously. ULIPs comes with various features like multiple fund options, different payment modes and options, and partial withdrawals.

These features help you in customizing your savings on the basis of your financial goals. ULIPs are excellent long-term investment option and could be used for your goals like buying your first house, saving for your kid’s education or marriage or your retirement. Additionally, ULIPs provide tax benefits under sections 80C and 10D.

National Pension System

National Pension System or NPS is a long-term investment product which is completely retirement focused. This system is managed by the Pension Fund Regulatory and Development Authority. It is a mix of equity, corporate bonds, fixed deposits, government funds and government funds amongst others.

You can choose to invest in equities through NPS based on your risk appetite. Moreover, by investing in NPS you can avail tax benefits under Section 80C (limit of 1.5 Lakh). NPS is helpful in achieving your long-term retirement goals.

Public Provident Fund

PPF or Public Provident Fund is one of the most popular investments in India for long-term financial goals like retirement planning and securing the future of your loved ones financially. The lock-in period of PPF has a high advantage, it offers fund protection and guaranteed returns which are completely exempted from tax.

The rate of interest on the PPF accounts is high as compared to recurring and fixed deposits. For the debt or fixed income investments of your portfolio, PPF is the best option. Moreover, the interest you earn from your PPF is not taxable.

Term Insurance

Term insurance is an investment option that provides a secure future for the financial goals you have in mind for your family if ever something was to happen to you. A smart investor must always consider term insurance as a mandatory investment.

The lump sum received as a death benefit can help your spouse take care of the daily household needs of your family along with payment of any outstanding loans and cost related to your child’s education and other goals. Moreover, with term insurance, you get tax benefits under section 80C towards premiums paid (up to Rs. 1.5 lakhs) and the death benefit received tax-free.

In addition to this, insurers such as Future Generaligive you an option to select the mode of payment of sum assured at the time of buying the policy. Therefore, you get the option to choose whether the sum assured would be paid as a lump sum or in the form of monthly payments.

Mutual Funds

Be it saving enough money for your child’s education, buying a new house, getting a luxurious car or just securing your retirement days; there is a long list of goals you must be willing to achieve. What if these goals can be accomplished while saving taxes?

Yes, you read it right. By investing in mutual funds, you can fulfill all these goals. Just like your goals, mutual funds have a variety of investments as per your requirements. Your choice of mutual fund should be dependent on the tenure of your investment, liquidity offered by the option and your willingness to take risks.

The more you invest in mutual funds over the long-term, the higher are your chances of getting good returns. You can also invest in tax saving mutual fund schemes or the ELSS and get up to 1.5 lakh Rs tax benefits under Section 80C.

Conclusion

There is a multitude of other investments in the market that can help you in earning good returns. However, you must be careful before investing your money. Taking risks in the market is necessary to gain good returns, but you should only do that after a good evaluation.

Time, patience, diversification and knowledge are four strategies that can help you reduce the risk factor in your investments. So, think, understand and decide the best investment plan for achieving your financial goals.

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