Financial Planning Ideas To Make Your Money Grow

By | May 18, 2016

7 Best Saving Hacks

If you’re looking for ways to make your financial portfolio work for you and save taxes too, read our guide for some great financial planning ideas. We’ll tell you where you can stash your money and make it grow this year.

  • Open a National Pension Scheme account

We have good news for all those investors looking at investing in the National Pension Scheme this year. You can save a ton with an NPS account.

An amount up to Rs. 50,000 invested in an NPS account will give you additional tax benefits under the new Section 80CCD(1b). These additional tax benefits are over and above the Rs. 1,50,000 limit allowed under Section 80C of the Income Tax Act. Not too shabby, huh?

  • Start a Systematic Investment Plan

You can save taxes under Section 80C of the Income Tax Act by investing in an Equity Linked Savings Scheme (ELSS). Choose to invest through the SIP mode and save money on taxes. Start saving early, even if it’s in small amounts with a Systematic Investment Plan and make it a monthly habit. Investing through an SIP means you don’t need to worry as much about the condition of the market.

  • Start saving for a house

Real estate prices have been on the decline or have stagnated over the past few months. This, in addition to interest rate cuts and the passing of the Real Estate Bill would make buying a home a great idea. Start saving for that dream home today.

Remember, buying a house is a long term commitment. Although an investment in a house has tax benefits, they come into play only after you get possession of the house.

  • Invest in Debt Funds

When thinking about a safe investment option, Fixed Deposits are the first things that pop into your head, right? If you fall into the highest tax bracket, we can suggest a better investment option – Short Term Debt Funds. While Fixed Deposits are a safe investment, they aren’t the most tax friendly (not unless you lock your money in for 5 years). A Short Term Debt Fund gives you better tax benefits if you hold on to the investment for more than 3 years. Then you need to pay just 20% in capital gains tax after adjusting the cost of the investment for inflation. This way, your real tax deduction would be lower than 20%.

  • Monetise gold investments

Heard about the Gold Bond Schemes? Gold Bonds are linked to the price of gold and give investors 2.75% interest.

  • Liquid Funds
Liquid Funds or open-ended Mutual Funds are your best bet if you have idle money in your bank account that you don’t want to be tempted to splurge. With liquid funds, you can get higher interest rates and your investment can be liquidated at any time. Get your money when you need it, as early as within a day.

Additional Reading: Prime Minister’s Gold Schemes

Invest smartly this year and reap the benefits!

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