Why Saving Is More Relevant In India Than Anywhere Else

By | May 17, 2018

With the size of the population in India and the lack of governmental support, personal savings and investments are more relevant than ever. Here are a few ways to help you do so.

Why Saving Is More Relevant In India Than Anywhere Else

“Survival of the fittest” is what Darwin’s Theory of Evolution says. This theory is relevant to almost everything in life, particularly to us Indians. That’s only because to survive you need money, and to have money you need to work and save. It could be argued that saving is more relevant in India than just about anywhere else in the world.

A developing nation comes such as ours comes with its own set of problems apart from all the development that has already taken place. With a nation of India’s size, sometimes it can be hard to derive benefits from a developing economy.

Unlike how it works in most developed western countries, where a taxpayer is assured a retirement plan and health benefits post retirement, in India, most retired people tend to depend on their children, or worse, find themselves in a dingy old age home.

Although our country has progressed in many ways, we are still far behind when it comes to a few things.


Despite boasting some of the best doctors in the world, not all Indians can afford medical treatment. Many rural places don’t even have access to decent medical care or hospitals. Moreover, treatments cost a bomb and if you aren’t insured you usually end up paying a lot from your pockets. This, in turn, leads to debt.

Public Infrastructure

Look all around you and you’ll notice more potholes than tar on the roads. The result? More Indians meeting with accidents. So get yourself insured soon.

If that’s not enough, the public transport, which isn’t very reliable, makes it necessary for most of us to have vehicles of our own.

Bonus tip: Need a Car Loan? Check and compare.

Lack of Social Security

Unlike how it works in an advanced western country, where monetary benefits are given to people with inadequate or no income, we don’t have access to similar government-funded aid/benefits. So, regardless of how rich or poor you are in India, the most you can get from the government is via tax benefits from an Insurance Policy.

Social Pressure

As is quite typical of Indian society, you are generally expected to graduate, get a job, start a family, buy a vehicle, etc. Sure, if you earn well or even manage to save a substantial chunk of your income every month, you should be able to fend off all the expenses that come your way quite comfortably.

However, most of the Indian populace tends to spend more than they earn or save. Usually, this is because we always try to outdo our friends or relatives and end up spending more than we can afford, eventually racking up debt.

Whether it’s your wedding, your child’s education or even purchasing a house or a vehicle, giving in to societal and peer pressure can certainly put a massive strain on your finances. This is why it is imperative to save early on in your career and stick to a monthly budget.

Additional Reading: How To Kickstart Investments And Tax Savings For 2018-19

What are savings?

Typically, the meaning of ‘saving’ is an economy of or reduction in money, time, or another resource. In this case, it most definitely is money. So, when you put aside a certain sum from your regular income, you save.

Traditionally, people saved money by collecting it all in cash or converting it into assets like gold and property. Don’t worry, because you don’t have to go hunting for an earthen pot to put your moolah in. There are newer and better ways to save money.

  • Fixed Deposit Account: A safe yet efficient way to earn interest on your money is by opening a Fixed Deposit Account. If you already have a Savings Bank Account your bank will be more than happy to help you open an FD Account.

In this account, your money is stashed away for a period of time, during which you earn a reasonable rate of interest. Post the account’s maturity, you are assured a ‘fixed’ rate of interest in addition to your principal amount. What better way to make your money grow huh?

  • Recurring Deposit Account: Any person with a regular steady income can opt to have a Recurring Deposit Account, wherein a fixed amount is put into an account which earns interest and can be withdrawn after its maturity date. You can decide on the amount you want to send into this RD Account on a monthly basis.

The account also lets you place a standing instruction to deduct this amount either on a particular date or after your monthly income is reflected in your bank account. The minimum period for an RD is six months and the maximum is 10 years. You can also avail loans up to 80% against the collateral deposit of an RD account.

Additional Reading: Recurring Deposit: A Big Yes or a Giant No

  • Postal Savings Account: India Post lets you open a Savings Account with them with an amount as small as twenty rupees. This account is ideal for people who do not want to maintain a minimum balance in their account, or who may have to withdraw the amount on an ad hoc basis or people who live in rural areas.

This account is also best suited for skilled workers who may or may not have access to banking facilities. Moreover, this account is easily transferable too.

Additional Reading: Everything You Need to Know About National Savings Certificate

  • Health Insurance: Let’s face it. In India healthcare is fast becoming expensive. This is why it can be hard to keep up with those medical bills. Our increasingly sedentary lifestyles also make us prone to a number of diseases and ailments.

Therefore, having Health Insurance will not only help you avoid paying huge medical bills but will also give you the option of getting cashless treatment. Learn about different terms of Health Insurance here.

Additional Reading: Make the Most of Health Insurance Top up Plans

  • Mutual Funds: If you’re ever bored of ‘fixed’ rates of Interest, you are welcome to invest in Mutual Funds. A Mutual Fund is a pool of savings contributed by a group of investors. This fund is then invested in one or many asset classes like equity, debt, liquid assets, etc. 

Naturally, in this case, the investor is subject to risk and returns based on the amount he has invested. But here’s the thing, you don’t always have to take that risk. Investing through an SIP will take care of it by averaging out the cost of purchase.

Additional Reading: 10 Benefits of Investing in Mutual Funds

Are you saving?

This is a question you must ask yourself every month. Because only when you start saving can you expect to achieve your financial goals and retire early and peacefully. Remember, your future is solely dependent on how much you save and invest.

Additional Reading: Don’t Just Save, Invest

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