3 Super long-term saving options

Though our elders strongly promote and talk about the ‘long term savings culture’ and its benefits, very few are actually putting aside money for their retirement life. According to the survey released in 2018, only 33% of the working population in India is actually investing in long-term plans; while 68% of now working population expects their children to financially support them after retirement, which seems unreasonable in today’s era.

What is long-term savings and why is it needed?

 A long-term investment is where you invest your money for a longer tenure to cover your financial needs in the future. While many people prefer dealing with money problems as they occur, or invest in short term plans, long-term savings actually make you ready for the expenses and financial surprises in the future.

Long term savings usually cover:

• Education and marriage of children
• Big purchases (home, car, etc.)
• Planning for a retirement
• Medical emergency
• Money set aside for any other financial needs or surprises

What are the 3 best long term savings options?

While investing in gold and real estate are the traditional long term savings options, people are now investing in many other options such as mutual funds which have been trending for a few years now. Saving bank deposits are ideal for senior citizens with higher FD saving account interest rate being one reason. Let’s talk about the top 3 long-term savings options:

1. Debt Mutual Funds:

Debt funds promise steady returns. Debt funds invest in fixed return securities, hence are less risky and volatile. Debt funds invest in money market instruments including government securities, corporate bonds, and commercial papers.

Other than debt funds, people who can take a little risk, equity mutual funds and hybrid funds are also considered for long term savings options.

2. National Pension Scheme (NPS):

National Pension Scheme (NPS) is managed by the Pension Fund Regulatory and Development Authority (PFRDA) and is a great option for building a retirement corpus. People can start early from years of age and keep saving under the NPS until the age of 65. While savings under NPS is mandatory for central and state government employees others can contribute to the scheme willingly with a minimum of Rs 1000 under Tier-I account.

3. Public Provident Fund (PPF):

Public Provident Fund (PPF) is safer and popular amongst working people in India. PPF offers 15 years long tenure and tax-free interest returns, which makes this long term savings option safe with an assurance of fixed returns.

Other than these options, equity mutual funds, long-term bonds, and fixed deposits (FD) are some more popular and trusted long-term savings options people can turn to and ensure substantial investment for future.

About This Author

Shaheen Shaikh http://www.adrclinic.co.uk Joined: April 29th, 2018