We all can agree with this that investing your hard-earned money is the only way to accumulate wealth over time. Putting your money in your savings account doesn’t make sense considering the difference of returns one gets in saving account v/s the investment are very significant. Furthermore, given the rate at which the investment is increasing, it is important that you begin investing in plans to help you prepare for your family’s financial security.
There are several ways to invest your money but one time investment plan can be useful for most people because they provide long-term benefits as well. In this article, we will show you the options.
What is a One time Investment Plan?
The term OneTime Investment Plan refers to an investment plan in which a lump sum amount is invested for a set period of time all at once. This investment strategy is appropriate for individuals with a significant sum of money and a high risk tolerance. A one time investing plan eliminates the need to worry about future uncertainty. The return can be calculated using the investment return calculator based on the investment amount.
Types of One time Investment Plans
The following are some of the one time investment plans one can choose:
Unit Linked Insurance Plan (ULIP): It is a one time insurance plan that offers policyholders the benefits of both investment and insurance. As a result, you can purchase a life insurance policy and the insurance company will invest the rest of the money. The fund allocation is adjustable and depends on your risk tolerance and fund preferences, such as equity, funds, or a hybrid scheme. You can transfer funds and adjust your portfolio to maximize returns. Additionally, the sum contributed to ULIPs can be claimed as tax-deductible under Section 80C.
Public Provident Fund (PPF): It is a government-run investment scheme with a 15-year lock-in period that can be extended for up to five years. Under PPF, the income generated by policyholders’ investments is compounded annually, resulting in high returns at maturity. The policyholders can put deposits from ₹500 to ₹1.5 lakh each year. Additionally, you can use your PPF amount as collateral when asking for a loan.
Gold ETFs (exchange-traded funds): Gold ETFs are an investment alternative because gold prices are relatively stable. It is a passive investment that can also help diversify your portfolio. To begin investing in gold ETFs, you must first own at least one unit of gold (one gram). It is a safe investment because of its inflation-beating yields and tax advantages. You can start investing by opening a Demat and trading account.
Fixed deposits (FD): Fixed deposits are the most popular low-risk one time investment option, and they provide substantial returns. One thing which assures policyholders is that the returns on this investment plan are guaranteed. Even though FDs have lower interest rates, many consumers choose them because of its safe returns. The duration of this policy often ranges from seven days to a year.
Post Office Fixed Deposits: It is another type of Fixed Deposit in which the Indian government determines the interest rate every quarter. The returns are guaranteed by a high interest rate. There is no volatility involved, making it a safe investment. Furthermore, POFD offers the advantages of tax exemption and early withdrawal.
National Saving Certificate (NSC): The government-backed post office scheme, NSC, is one of the safest investment options on the market. NSC guarantees returns and offers competitive interest rates on your secured money. This policy lasts between five and ten years and one can start investing with a minimum of ₹100. However, there is no upper limit for investing in NSC. The certificate may also be transferred from one individual to another.
How Can An Investment Return Calculator Help You?
The investment return calculator in India provides useful information and simplifies the investment process by assisting with the following:
- Estimate the investment amount: Are you unsure how much you should invest to attain your financial goal? The investment return calculator can help you find the answer. All you have to do is add variable such as your goal returns, projected return rate, desired tenure, and frequency. The calculator will then estimate how much you should start with to attain your savings target. To achieve the required amount of ₹100 at a 4% compound interest rate after 2 years, the calculator suggests investing ₹92.46 initially.
- Estimate the Future Value of Your Invested Savings: Similarly, if you have already selected how much you will invest in an aforementioned one time investment plan, you may use the investment return calculator to predict how much you will receive when your investment period ends. You can then budget your future costs properly. For example, investing ₹100 at the start and ₹10 at the end of each month for 2 years with a 4% annual compound interest rate results in a total of ₹357.42.
- Estimate the actual return on investment: If you know the maturity value for a certain investment amount, the investment return calculator can help you estimate the actual return. This function is especially useful when comparing different investment plans, allowing you to make more informed decisions for better financial outcomes.
For example, if you received ₹500 after investing ₹100 at the start and ₹10 at the end of each month for 2 years, simply enter these amounts in the appropriate fields. The calculator indicates that you earned ₹160 in total return.
- Evaluate the progress of your investment plan: The calculator is more than just for initial planning; it’s also a dynamic tool for tracking and evaluating your investment progress. You might modify your investment plan by comparing your progress to expectations. The calculator supports both annual and monthly investment plans, helping you stay on track with your financial goals.
Saving and investing correctly are essential for accumulating wealth over time and achieving financial objectives throughout life. A sound investing strategy is ensuring that you have enough assets available when needed, both for known and unknown goals. This involves having a sufficient emergency reserve, addressing short-term goals, meeting long-term financial goals, and eventually reaching financial independence.
