Coming up with a long-term investment plan is one of the most important actions you can take for building your wealth and safeguarding your financial future. For helping you design such a plan one of the important components to be included is a term insurance plan. As the name suggests a term insurance plan or term life insurance plan provides life cover for a certain period of time. What makes a term policy very practical is the high sum assured and a minimal premium amount that you need to pay. Let us take a look at some of these attractive long-term investment options available in India right now.
This is one of the oldest types of investments in the country. This is considered to be one of the safest ways of investing money for quite a long period, which starts from 3 years and may go up to 10 years. The return starts from 3% and may go up to 6.5% per annum. Once the term is over, the money along with interest can be withdrawn. The interest rate that you get in FD is higher than RD or savings account. You can withdraw the money before the maturity period; however, have to pay a penalty.
Post Office Savings Schemes
Similar to banks, the Postal department also offers saving schemes. These schemes are much sought after because of security and better interest rates. A few of the popular post office savings schemes include National savings certificate, post office monthly income scheme account, Kisan Vikas Patra, post office Savings account, Sukanya Samriddhi Yojana, 5-year senior citizen savings scheme, etc.
Public Provident Fund (PPF)
You can invest your money in PPF for up to 15 years. The rate of return is fixed by the government each year. Currently, the rate of return is 7.1%. When you have a PPF account, you can claim tax deduction under Section 80C.
Corporate Fixed Deposits
The money you invest in Corporate Fixed Deposits is collected by corporates for operational activities. It is quite similar to FDs in banks. However, this kind of investment involves risks. The rate of interest is 6 to 8% per annum, which is higher than FDs in banks.
Unit Linked Insurance Plan (ULIP)
As you put money in ULIP, you undoubtedly invest capital but also get insurance. One part of the premium you pay goes into securing your life and the other one goes into stock market investment and helps in getting good returns. The rate of return is usually 8%. However, the money is invested in stocks; thus, you can expect the return to fluctuate. This means, there is no guarantee of any fixed return. This is one of the reasons why the administrative charges and premiums are high.
National Pension System (NPS)
Introduced by the Government of India, it is a long-term investment plan and a pension scheme that provides regular income to the investors, post retirement. You as an investor can keep investing your money in this scheme till the age of 60 years. After this, 40% of the funds have to be used for buying an annuity plan which provides regular income. You can withdraw the rest of the 60% as a lump sum amount.
There are several long-term plans like these. However, you need to be sure of the kind of investment plan you are looking for. You also need to be certain about the years for which you want to invest your money in such plans. If you want to know more about the long-term plans and compare them with the others, you can visit the website of IIFL today.