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How Middle-class Families can Plan their Investment Better?

More than 135 million people live in India. The middle class is about 35 million people, over 20% of the population. All of them are trying hard to increase their income and reduce expenses. 

To get rid of this stress and support your financial health, you need to have a lot of different sources of revenue. Investment is one way to deal with the problem. Financial planning is often thought of as a service only for the rich; however, a sound financial plan can guide your life’s journey. It helps you stay in control of your income, expenses, investments to efficiently manage your money and achieve your goals. 

Make sure your financial goals are a good fit for your plan when you start making one. Whether you want to buy a bigger car in 5 years or save for your kids’ education, setting the right goal helps determine how much money you need to put away today. Afterwards, the next step isn’t very hard. You need to pick the right tool to help achieve these goals. While there are multiple types of investments like mutual funds, SIPs, monthly saving schemes, and so on, only some are suitable for the long term.

Investment Options for middle-class people

Below are the types of investment middle-class people might invest:

  1. The Public Provident Fund (PPF)

PPF is one of the most popular ways to save money for the people in India. To open a PPF account, you can go to any post office or a bank approved by the government. You can start investing in it for as little as Rs. 100 a year to get guaranteed, tax-free money. A PPF account has a lock-in period of at least 15 years.

Fixed Deposit

One of the common types of investments, fixed deposit, is the option of a risk-free return for all investors looking to grow their money.

National Pension Plan (NPS)

NPS is one of the best government-backed investment schemes to help India plan their retirement. It invests the money in equity, bonds, government securities, and other types of investments based on what the investor wants. You can only get your money out of the NPS when you’re 60.

Unit Linked Insurance Plans

A ULIP is another type of investment tool that insurance companies offer. It combines both insurance and investment into a single plan that is easy to understand. Some of the investor’s money to invest in equity, debt, or hybrid funds goes into these funds. The rest goes into life insurance for the investor.

 Monthly Saving Scheme

A monthly saving scheme is a perfect way to save money. You put some money in, and each month, you’ll get a cheque for the interest. This savings plan is a low-risk way to make money each month. It gives you a steady income. The government is paying for the scheme, so the money you put in is safe. If you want to take the money out of the savings plan or reinvest it, it’s up to you.

You can start with a small amount when you open an account and then add more later, depending on how much you can afford. People who save with this savings plan get a lot of money back, which is more than other investment plans. However, the post office monthly saving scheme will be taxed. On the bright side, this option doesn’t have tax taken out of it at the time of payment.

Conclusion

Due to the increasing needs, most middle-class individuals often find themselves in debt, unable to gain any financial peace. Find out what intelligent decisions you can make to arrange your money better and make good investment selections.

You may also invest in Gold ETFs, Monthly Income Scheme in the post office, RBI Bonds, and Senior Citizens Savings Scheme, which offers up to 7.05% p.a. of interest, in addition to the alternatives mentioned above. Consider your long-term financial objectives, as well as how much risk you are willing to take, before deciding on an investment vehicle.

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