Tax Savings plans are those financial plans which help an individual to secure the savings in order to reach their financial goals. These types of plans are not of one-size-fits-all character. Just like every person has a different objective for saving ditto there are different saving plans. One must be very diligent in choosing the right kind of financial plans that suits ones immediate needs, budgets and objectives.
Various types of saving plans are explained below in brief:
Emergency Savings Plans for emergency: this is a fund which comes in very handy in a unlike event that we encounter, such as medical expenses, car repairs or home appliances repairs etc. one may use their saving accounts in a bank to cultivate such emergency funds as these allows access to quick liquidity. One is also given an option to benchmark an upper limit to such funds. So, when such a limit is surpassed the excess amount could be transferred to other financial plans.
Savings Plans for retirement: these plans are people who want to plan in advance for their post-retirement period. Many insurance companies have come with such plans which give dual benefit of life insurance coupled with retirement benefits. Here the saver has too options either to opt for a lump sum payment at the end of a prescribed period or opt for a regular stream of income after the designated age.
Smart Savings Plans: these kinds of savings plan aim at an objective which require a significant sum of money. For instance purchase of a new house or buying a new car or going for a foreign holiday tour. Typically such funds need to be invested in those financial instruments which provide a greater window for return on investment than conventional instruments like saving accounts. Hence to facilitate such savings one can invest in certificates of deposit or government issued bond. Government issued bond are those instruments which are eligible for tax exemption up to a certain limit hence investing in such instruments are also widely referred as tax saving plan.
Plans for kids education: in order to save for the education of ones children, one may have the options to opt for college savings plan (growth-oriented)To save for your kids education, to which one have to begin contributing from the very day of the childs birth. These plans also come under the gambit of tax saving plan.
Endowment Savings Plan: this is a new age financial plan which enables people to save their money with a long-term perspective while at the same time accruing the benefits of an insurance plan. Generally these plans range from a maturity period of 5-20 years. The sum that is assured is paid to the holder over and above the bonus that has accrued over the period of the plan. It is either paid as a full lump sum amount in the event of death or on maturity whoever is earlier.
Various types of saving plans are explained below in brief:
Emergency Savings Plans for emergency: this is a fund which comes in very handy in a unlike event that we encounter, such as medical expenses, car repairs or home appliances repairs etc. one may use their saving accounts in a bank to cultivate such emergency funds as these allows access to quick liquidity. One is also given an option to benchmark an upper limit to such funds. So, when such a limit is surpassed the excess amount could be transferred to other financial plans.
Savings Plans for retirement: these plans are people who want to plan in advance for their post-retirement period. Many insurance companies have come with such plans which give dual benefit of life insurance coupled with retirement benefits. Here the saver has too options either to opt for a lump sum payment at the end of a prescribed period or opt for a regular stream of income after the designated age.
Smart Savings Plans: these kinds of savings plan aim at an objective which require a significant sum of money. For instance purchase of a new house or buying a new car or going for a foreign holiday tour. Typically such funds need to be invested in those financial instruments which provide a greater window for return on investment than conventional instruments like saving accounts. Hence to facilitate such savings one can invest in certificates of deposit or government issued bond. Government issued bond are those instruments which are eligible for tax exemption up to a certain limit hence investing in such instruments are also widely referred as tax saving plan.
Plans for kids education: in order to save for the education of ones children, one may have the options to opt for college savings plan (growth-oriented)To save for your kids education, to which one have to begin contributing from the very day of the childs birth. These plans also come under the gambit of tax saving plan.
Endowment Savings Plan: this is a new age financial plan which enables people to save their money with a long-term perspective while at the same time accruing the benefits of an insurance plan. Generally these plans range from a maturity period of 5-20 years. The sum that is assured is paid to the holder over and above the bonus that has accrued over the period of the plan. It is either paid as a full lump sum amount in the event of death or on maturity whoever is earlier.