do-long-term-investments-in-saving-plans-ensure-better-returns

Do Long-Term Investments in Saving Plans Ensure Better Returns?

Long-term saving plans: Key to higher, safer returns.

Written by : Knowledge Centre Team

2026-07-24

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8 minutes read

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When it comes to financial planning, one question always pops up: "Should I invest for the short term or the long term?" While both have their merits, long-term investments in savings plans often stand out for those who want to build a strong financial foundation and achieve life goals like buying a house, funding a child's education, or planning for retirement.

But do long-term investments in savings plans truly guarantee better returns? Let’s unpack this question and understand how time can become your biggest ally when investing wisely.

Key takeaways: 

  • Long-term investments in savings plans can provide financial security during uncertain times.

  • Building a retirement corpus steadily over the years ensures peace of mind later in life.

  • Consistent saving habits are more reliable than depending solely on external income sources.

  • Financial planning should be independent of job or business stability.

  • Early and disciplined investing leads to stronger financial resilience in the long run.

Understanding Long-term Saving Plans

Long-term saving plans are financial tools that require you to invest consistently over a long period, typically five years or more. These could be traditional instruments like Public Provident Fund (PPF), National Savings Certificates (NSC), and life insurance-linked savings plans, or market-linked options like Unit Linked Insurance Plans (ULIPs) and mutual fund SIPs.

These plans are designed to encourage regular savings and help you accumulate wealth gradually while also providing benefits like tax savings, disciplined investing, and compounding returns.Real-life Example: How Simran Built Her Wealth?

Simran, a 40-year-old professional, worked in one of the country’s leading firms. However, due to mounting debts and several failed tenders, the business faced severe losses. Eventually, the owner, once a highly successful entrepreneur, was forced to declare bankruptcy and shut down operations. While the owner’s fortunes took a steep downturn, Simran stood on solid ground. Over the years, she had diligently built a substantial retirement corpus, securing her financial future despite the company’s collapse.

How does Simran, the secretary, have such immense wealth, enough to financially support her boss in restarting the business?

The answer is long-term investments.

  • Ever since she started working, Simran has made it a habit to put a certain sum every year in a long-term investment. This enabled her to accumulate a large fund over time

  • Long-term investments are those where you invest and hold for a period exceeding 1 year, typically 5-10 years

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How did Simran get a Good Return?

As discussed, Simran amassed a good wealth due to investment in the longer term. She got the advantage of two of the most defining features of long-term investments. These are:

  • Untouched Investment Growth

  • Power of Compounding

  1. Untouched Investment Growth: Once you start investing in a long-term scheme, it is better to keep your investment intact and not change anything. This allows more time and space for your investment value to grow better.

    Simran kept on investing a part of her salary every month and left the investment untouched. She did not withdraw from the funds she was investing, nor did she change anything, which helped her corpus reach a good value.

    However, you should note that not touching your investment does not mean you don’t keep a tab of it.

  2. Power of Compounding: There is a popular saying: "The best time to invest was yesterday, the next best time is today." This sums up the gist of the power of compounding returns. The earlier you start investing, the more you can benefit from the compounding returns principle. Simran started investing right from the time she started working, which helped her generate good wealth.

    Compounding is the benefit you get if you reinvest the interest earned back into your investment.

    Here is how compounding works.

    For example    , you have invested ₹1 lakh in an investment that earns interest of 10%. After 1 year, the value of your investment will be ₹1.1 lakhs. If you don’t take out interest and keep it invested, then you will earn interest on ₹1.1 lakhs. Thus, the interest will be ₹11000. Staying invested for a longer time will give you massive returns.

Why Should You Invest Long-term in a Savings Plan?

Like Simran in the above case, you, as an investor, can also reap many benefits if you decide to invest for the long term. Here are a few reasons why you should consider a long-term investment

  1. Investing in Higher-Risk Assets: The market is full of volatility. Volatility is often associated with market risk. The more volatility, the more will be the risk in an investment. Generally, the risk goes down in a long-term investment.

    So, if you have time and can invest for a longer period, you can consider investing in high-risk assets such as equity funds. Since high risk correlates with a higher return, equities also possess the ability to fetch you greater returns.

  2. Maximises the Chances of Growth: As told earlier, the risk is higher in the short term. If you jump in and out of your investments, you are more likely to lose money. But if you decide to stick with your investment, it has a very good chance of rising, especially if you are associated with strong companies.

    Also, long-term investments offer you chances to rectify your mistakes and minimise your losses. For example, you decide to buy a stock as you see prices rising, but soon it falls to the same level.

    If you are invested for the long-term, you can add more at a lower price and earn gains when its market performance increases. Long-term investment also helps you get an idea of how a stock will react in the future.

  3. Most Efficient Way of Managing the Risks: Time is a risk-mitigating factor. Long-term investment generally has a time frame of a minimum of 7-10 years. This provides your investment with ample time to grow.

    So, the more time you invest in it, the lower the risk becomes.
    • The Sensex returns show that the risk keeps decreasing as the time for investment increases.

      For a 1-year timeframe, the risk is 35%. It comes down to just 5 per cent when the investment is held for 10 years.

Long-Term Savings & Investment Plans from Canara HSBC Life Insurance

Now you know how long-term investments can benefit you, look at some long-term savings plans offered by Canara HSBC Life Insurance. These plans are designed to help you build wealth over time while also securing your family’s future. Whether your goal is retirement, education, or wealth creation, there’s a long-term plan tailored to meet your needs.

With features like flexible premium payment options, guaranteed benefits, and the potential for market-linked returns, these plans cater to a variety of financial goals, be it building a retirement corpus, funding your child’s education, or creating long-term wealth. By starting early and staying invested, you not only accumulate significant savings but also enjoy life cover that safeguards your family’s future against uncertainties.

Are Long-term Saving Plans Worth It?

Absolutely. Long-term investments in savings plans do ensure better returns, not just financially but also in terms of peace of mind, goal achievement, and financial security. They work best when you allow your money time to grow, remain disciplined in your contributions, and resist the urge to withdraw prematurely.

Like Simran, your financial stability tomorrow depends on the decisions you make today. So start now. Choose the right plan, stay committed, and let time do the magic.

Conclusion

Long-term savings plans aren’t just about better returns; they’re about building a strong financial foundation that supports your life goals and protects you from uncertainties. The power of compounding, disciplined investing, and risk reduction over time makes these plans an essential part of any financial strategy. If you want to make your money work harder for you, consider exploring long-term savings and investment plans from Canara HSBC Life Insurance.

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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