How to Get Good Returns and Tax Exemption in an Investment plan

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The key motive behind investing your money is to generate good returns from it. You would want to park your money in schemes that you assume to be safe and from where a healthy return can be expected. Investments are broadly classified as short term investments and long term investments. Investment schemes carrying a maturity of less than one year are termed as short term investments and schemes carrying a maturity over one year are classified as long term investments. Sometimes people use the term ‘mid-term investments’ for investments done for 1-5 years.

Investments vary from each other on various parameters like inherent risk and liquidity. Liquidity refers to the degree of ease in converting that investment into cash. For example investment in equity is highly liquid as in a click on the screen the shares can be sold and converted into cash whereas investment in terms of real estate can take time to be sold and converted into cash. On the basis of these parameters and expected returns, an investment portfolio is planned.

The construct of the portfolio should be such that offers a good scope of growth, has managed risk and provides reasonable liquidity. Most often, investing options that offer higher rates of return have more risk quotient. This is quiet justified, if you have the belly to pocket more returns then you must have the heart to assume more risks. So, your investment arrangement should be such that has a balance of high growth and less risky investments, so that if there is loss in some schemes, it can be balanced out from your earning ones. If the gong of your mind is oscillating to choose among high growth investments or lower risk ones, then take the decision on the basis of factors like your age and responsibilities. If you are young and unmarried, then you should go for high growth riskier options but if you are approaching retirement then go for steadier options that carry lower returns.

Among investment plans offered by life insurance companies, ULIPs or Unit Linked Insurance Plans offer the highest return but as the premiums are invested majorly in equity, these plans are some of the riskier life insurance plans. For risk reluctant people endowments are a better option. People invest in life insurance plans in order to safeguard their family against the financial hazards of their untimely death and if they are getting some returns on their premium then it is a big bonus. Investment insurance plans like ULIPS and Endowments offer dual benefits like death benefit and maturity benefit. Under death benefit your nominee gets a specified sum assured upon your death during the currency of the policy whereas under maturity benefit you get the sum upon surviving the policy term.

It is important to compare investment plans before investing if you want to save money and get a plan with better features. Among the various companies available, it can become a challenge to compare investment plans. Thus, it is recommended that you take services of a dedicated and reputed insurance web aggregator website. Here, at a single web location you can compare plans very conveniently and design your portfolio aptly.

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