How to Choose the Right Long-Term Savings Plan?

Written by : Knowledge Centre Team

2026-07-29

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What is a Savings Plan? | Canara HSBC Life

Want to save money for a future goal? A long-term savings plan is your saviour. It is never too late to save some money, which would help you in unforeseen circumstances in the future. A long-term savings plan is a type of investment that helps you set aside money that you do not need right now, so it can grow and support you when you need it most.

India has a strong culture of saving with a relatively high savings rate, around 19.68% of GDP, according to national statistics.

As easy as it sounds, saving is not a piece of cake. Gone are the times when putting a 1-rupee coin in a piggy bank was all you had to worry about. A long-term savings plan requires a lot of contemplation to choose a plan that suits your plans and financial conditions the best. Keeping in mind the current conditions, it is important to choose the perfect online savings plan for your family.

Key Takeaways

A long-term savings plan helps you build a financial safety net for future goals or emergencies.
Evaluate your financial goals, liquidity needs, risk appetite, and tax-saving options before choosing a plan.
Popular options include ULIPs, PPF, NPS, ELSS, and guaranteed savings schemes.
Plans like ULIPs offer both life insurance and market-linked returns.
Use tools like retirement or goal calculators to assess your long-term needs.

7 Points to Consider While Choosing a Long-Term Savings Plan

Here are some important factors that you must definitely consider when selecting from a variety of savings plans.

Future Goals: Your goals are the driving factor, which is urging you to invest in money-saving plans. Make a list of all the long-term and short-term financial goals, and then choose a plan that suits your future goals perfectly. For e.g., if you are saving up for a brand new car, a savings plan with guaranteed returns will be perfect for you. On the other hand, if you are saving for a long-term goal, you’ll need a plan that offers stability and the assurance of reaching that financial milestone.
Available on Online Platforms: Online availability makes it easier to invest, track, and manage your savings conveniently from anywhere, anytime. Therefore, you should check whether the plan you are choosing is available online or not. With its online availability, you also need to check if there are options for online investment, management, and withdrawal. In online savings plans, there are options for auto-debit, which are beneficial for salaried individuals.

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Liquidity: Before choosing among long-term online saving plans, consider your liquidity requirement. The savings plan you choose should provide you with adequate liquidity to satisfy your long-term needs. You should be able to withdraw money from the funds in a time of emergency.
Tax Exemption: Make sure to consider plans that provide tax benefits like tax exemption and tax-free maturity value. Tax liabilities can cut off a part of your return, leaving you with deducted money. Investing in long-term savings plans that enable tax exemption not only saves your tax money but also protects you in times of emergency. Under section 80C of the Income Tax Act, a maximum of ₹1.5 lakh can be claimed for tax exemption.
Risk & Reward Factor: One of the most important factors in a savings & investment plan is the risk and reward factor. Every individual differs in terms of risk appetite, and it is essential to select the best savings plan in India for you, according to your risk appetite. The balance between the rewards and the risks in the plan has to be favourable.

If you are hunting for a long-term online savings plan, you need to choose a savings plan that gives you guaranteed returns with low levels of risk. This plan not only gives you the benefit of guaranteed returns of the intended maturity value, but also extra loyalty bonuses for investing in the plan for a long period.

Reviewing the Plan and Updating the Investment Portfolio: The performance of the plan is also a significant feature to examine. Your investment portfolio should be reviewed at least once a year to make necessary adjustments and identify areas where you can seek higher returns. Also, while reviewing the plan, see if you can diversify and invest in more than one investment product. Diversifying reduces the risk associated with each plan.
Flexible Terms & Conditions: With investment in a savings plan, terms and conditions are bound to be applied. However, luckily, some savings plans have flexible and compatible terms and conditions. In the flexibility factor, you will have to look for flexibility in the investment mode and the investment period. Try to find a plan that gives you options in both categories.

Types of Long-Term Savings Plans

Now that you are well-versed with the conditions you have to keep in mind to choose a savings plan, here are the most popular types of long-term savings options, which people in India invest in:

Unit Link Insurance Plans (ULIPs): In a ULIP savings plan, the individual gets the benefit of both investment and insurance. You have to pay a premium monthly or annually. A part of this premium is used to cover your costs of insurance, and the other part is used as an investment in the fund of your liking. You get the best of both worlds and a secure long-term plan. There are options for equity, hybrid, and debt funds.
For example, the Titanium Plus Plan by Canara HSBC Life Insurance is a great example of a ULIP, with the flexibility of premium payment and a safety net of life insurance.
Public Provident Funds (PPF): If you are looking for a plan with constant interest at the lowest risk, this is the plan for you. PPF offers tax exemption, making it more attractive. The tenure for a PPF is 15 years and can be extended in blocks of five years.
You can withdraw funds after five years from the beginning of the plan. It is a post office savings scheme. There is flexibility in this plan in terms of the investment amount. With a small investment, you can acquire great returns in a PPF.
National Pension Schemes (NPS): This scheme is a public scheme backed by the Government of India. Individuals between the ages of 18-60 can invest in this scheme. The age limit has been extended to a maximum age of 70 years. Through this scheme, you can invest in equities, debts, and other such instruments.
The final pension you acquire is your return on the investment. In cases of emergencies, this scheme gives you the liberty of withdrawing a partial amount of funds.
Equity Linked Savings Scheme (ELSS): ELSS is one of the best mutual funds as it becomes eligible for tax exemption when the investments are under ₹1.5 lakh. It is the only scheme that gives you the incentive of tax exemption and guarantees you high returns in the future.
The only drawback of ELSS is that it entails higher risks than other schemes. Every deposit in a particular account has to follow a strict lock-in period of 36 months, and thus, it is not possible for you to withdraw funds from the account under any circumstances. You will have to wait for the lock-in period to cease.
Guaranteed Savings Scheme: A guaranteed savings scheme is a safer alternative to ULIP, as it contains less risk with guaranteed returns. You can also claim tax benefits like tax exemption in this scheme. It provides life cover for the entire term, but you pay the premium only for a limited period. You can choose the payment term according to your payment capacity and horizon.

Scheme	Duration	Rate of Interest*	Amount Contributable	Taxability of the Returns
ULIP	5 years (minimum) - 20 years (maximum)	It is not fixed. Depends on the ULIP fund performance	Minimum - ₹1,500, Maximum - None	Not taxable only if the annual premium ≤ ₹2.5 lakh
PPF	15 years	7.1% p.a.	Minimum - ₹500 per annum, Maximum- ₹1.5 lakh/year	Interest income is tax-exempt
NPS	Until the age of 70 years	5% p.a. to 8% p.a, market-linked, not guaranteed..	Minimum - ₹1,000 per annum, Maximum - ₹1.5 lakh	Upon retirement, 60% of the corpus is tax-free. Annuity pension received on the balance of 40% is taxed at slab rates
ELSS	3 years	Not fixed	Minimum - ₹100 per annum, Maximum - No limit	LTCG above ₹1.25 lakh/year taxed at 12.5%; dividends taxed as per investor’s income slab
Guaranteed Savings Scheme	Until the age of 60	NA	Minimum - ₹1,800, Maximum - None	Taxable under Section 80C of the Income Tax Act

Wrapping Up

Saving is the smartest decision one can make in their life. It helps you in all kinds of emergencies and plays a major role in fulfilling your future financial goals. A long-term savings plan increases your annual income, generates income on idle cash, gives you life coverage, and offers other such incentives.

While choosing an online savings plan, it is recommended to compare different plans, be thorough with all the terms and conditions, and then invest. There are a lot of options in the market for money-saving plans. However, the tough nut is to choose the right one!

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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