Newlyweds are often confused when it comes to managing their shared finances. Understanding the various investment options can help them plan for their future in an informed manner. This can not only help tackle any financial crises but also anticipate their future smartly.
With a plethora of options, selecting the right choice is a daunting task. Your financial goals determine which investment vehicle is suitable for you. Let us look at a few options that can help make long term investment–
#1 Public Provident Fund (PPF)
One of the most secure forms of investment is a public provident fund or PPF. This investment has a government backing giving you the confidence of assured returns. A PPF account can be opened by any resident individual, whether they are salaried or otherwise. Moreover, the returns under a PPF scheme are among the highest in government-backed securities.
While you may think a 15-year lock-in to the PPF account is too long, it can be advantageous for future planning. The amount accumulated over such a long tenure can be used for various purposes like buying a house or for funding your child’s education or even your retirement. Another advantage of investing in PPF is the tax-free nature of both, its investment as well as its returns.
#2 Insurance Policies
At most unexpected times, medical emergencies strike and take you by a storm. The loss of a member of your family can be a gruesome reality, but life must go on. For such situations, one must be prepared well in advance. Hence, it is recommended to avail a life insurance cover at the beginning of your married life. It can not only provide financial support to your family in your absence but also help them maintain their livelihood. Moreover, you can avail benefits under the Income Tax Act, 1961, for the premiums paid.
#3 Real Estate
Real estate has been a lucrative field for a very long time. Most investors prefer manifold growth potential while investing in property. Buying a piece of land or investing in property can help attain your long term financial goals. Also, since the demand for properties always exists, selling them for cash in the future can be helpful to fulfil your financial needs. Another point you need to note is that any loan borrowed to purchase these properties can be availed as a deduction in your return of income.
#4 Unit Linked Insurance Plans (ULIPs)
Newlyweds are generally ones who can assume risk but as well need a protective cover. ULIPs provide an option to choose between equity or debt funds or a combination of both.These funds can be either equity-based, debt-based or even balanced. The policyholder can decide on which type of funds to invest keeping in mind their financial goals. ULIPs are available to be purchased online too. A nifty online investment that can offer double benefits, insurance as well as corpus accumulation.
#5 National Pension Scheme (NPS)
The NPS is a long term investment that aids in planning for your retirement and is managed by the Indian government. It ensures you have a steady income even during your retirement days. On retirement, an individual can withdraw up to 60% of the accumulated corpus, and the balance can be received in the form of regular payouts. NPS is also available as an online investment option in this digital age. The tax laws permit a deduction for such investment up to ₹ 50,000 effectively taking your overall deductions to ₹ 2 lakhs.
To conclude, make a note of these investment options at the beginning of your marriage as it will help you in planning for your future in the start itself. Be prudent and get investing!