Saving Plans as an Investment | Best Saving Plans in India

Are Saving Plans a Good Investment Choice for You?

Learn how savings plans align with goals like liquidity, tax savings, risk tolerance, and financial security for your family.

Written by : Knowledge Centre Team

2025-11-06

1370 Views

11 minutes read

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The definition of Saving has evolved over the years from “putting aside” some money to “investing” the money so that it works hard and grows over time. The objective of saving has also changed because the fast-growing, increasingly educated Indian society is more aspirational than ever. It is natural to dream of a periodic vacation, offer the best possible education to children and lead a comfortable life before and after retirement.

When you have a family, you will also think of ensuring a steady income or some sizeable contingency fund to take care of your family if you are not around.

Key Takeaways

  • Saving is no longer about hoarding cash; it's about smart investing to meet life goals.

  • Saving plans help build wealth while offering life protection, tax benefits, and stability.

  • Evaluate saving plans for liquidity, tax impact, risk-return fit, and protective features.

  • These plans are especially effective for long-term, goal-based investing.

  • Look for premium protection features to secure your goals in case of life uncertainties.

Saving Plans as an Investment Avenue

There are several investment options available across various asset classes, Including Gold, Real Estate, Fixed Deposits, and bonds. It is tempting to stay invested in one of them or all of them based on the current market trends. However, the best savings plans and the best savings schemes focus on financial goals and invest in assets that can help achieve these goals.

So, how do you evaluate if a savings plan is right for you? You look at key financial objectives,  like liquidity, risk, and tax efficiency.

Let us begin with liquidity: 

  • Liquidity: Liquidity refers to how quickly and easily an investment can be converted into cash without significantly impacting its value. It becomes crucial during emergencies when immediate access to funds is needed. Before choosing an investment, consider the following:

    1. Are withdrawals (turning to cash) possible in case of emergency?
    2. Does the value of the asset change very quickly and frequently (volatile)?
    3. Movable and immovable assets, such as Gold and Real Estate, are highly illiquid and volatile. Selling off physical gold could be challenging, and real estate sale depends on buyer availability, market dynamics, etc.

While equity stocks could be easily turned to cash, but suffer from frequent and significant changes in their value.

  • Taxation: While planning your investments, tax-saving potential is a key consideration. The right savings plan can help you grow your money while reducing your tax burden. Here’s how:

    1. Tax deductions on premiums paid under Section 80C
    2. Tax-exempt withdrawals under Section 10(10D) (if conditions are met)
    3. Long-Term Capital Gains (LTCG) tax treatment on maturity value or market-linked returns

More tax-efficient investments will save your wealth from erosion due to taxes.

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  • Protection Against Life’s Uncertainties: Many saving plans come with built-in features like premium protection, which ensures that your financial goals remain on track, even in the case of death or disability. This adds a critical layer of security, especially for family-centric goals like a child’s education. With premium protection:

    1. The future premiums are waived off in case of untimely demise or permanent disability.
    2. In case of untimely demise, the family will receive the sum assured immediately
    3. The child will receive the fund value at the time of maturity-either in regular income streams or as a lump sum 
       
  • Risk vs Return: Are You Aligned With Your Goal Timeline?: Before you start parking your hard-earned money into an investment, you should know whether the risk is worth taking. Ask yourself:

    1. How long can you stay invested? Or how far is your goal?
    2. Short-term or less than 3-year investments should avoid equity exposure

    Here’s a quick guideline:

    1. Short-term goals (under 3 years) – Avoid equity; opt for low-risk, stable-return options.
    2. Long-term goals (5+ years) – Allocate a portion to equity to beat inflation and achieve real growth.
  • Financial Support for Family: You are expected to have a large term insurance cover to protect your family from the consequences of your untimely demise. However, you also have a few very important financial goals to meet along the way. While the term insurance will take care of the survival costs of the family, you can use separate life insurance plans to protect the goals. These plans will:

    1. Help you build the corpus for the goal
    2. Protect the goal from your untimely demise
    3. Offer tax-free maturity benefits, adding to the overall efficiency
  • Flexibility to Adapt to Life Changes: Life is dynamic. As your responsibilities and income grow, so do your financial goals. A good savings plan should be flexible enough to accommodate these changes. Here’s how flexibility in your investment plan helps:

    1. Top-up Options: Increase your savings as your income grows, without starting a new plan.
    2. Partial Withdrawals: In certain plans, you can make limited withdrawals after a lock-in period to meet urgent needs.
    3. Switching Between Funds: Market-linked savings plans (like ULIPs) allow you to switch between debt and equity funds based on your risk appetite and market conditions.
    4. Premium Holidays: Some plans allow temporary pauses in premium payments in case of financial strain.

    This flexibility ensures that your plan grows with you, and not just for you.

    Therefore, it is important to make the right investment choice and then stay invested for the defined term.

    For example, we, at Canara HSBC Life Insurance, offer different insurance policies that provide life cover, a guaranteed income stream, and guaranteed additions to the Sum Assured. If you are exploring the best savings policy in India, you canconsider the various competitive plans from Canara HSBC Life Insurance. 

Conclusion

Saving plans can be a strong investment choice if they align with your financial goals, risk appetite, and life stage. They are not only a disciplined way to build long-term wealth but also offer added benefits such as life cover, tax efficiency, and protection against uncertainties. However, they must be chosen carefully after evaluating factors like liquidity, return potential, and risk appetite. 

Whether your goal is to secure your family’s future or to build a comfortable retirement fund, a well-structured savings plan can serve as a reliable element in your investment portfolio.

Disclaimer - This article is issued in the general public interest and meant for general information purposes only. The views expressed in this blog are solely those of the writer and do not necessarily reflect the official policy or position of Canara HSBC Life Insurance Company Limited or any affiliated entity. We make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability, or availability with respect to the blog or the information, products, services, or related graphics contained in the blog for any purpose. Any reliance you place on such information is therefore strictly at your own risk. You should consult with a qualified professional regarding your specific circumstances before taking any action based on the content provided herein.

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