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Saving vs Investment: which is better?

dateKnowledge Centre Team dateJanuary 28, 2021 views232 Views
Saving vs Investment: which is better?

Saving and investment are concepts that appear to be highly confusing in the eyes of many. You may think both saving and investment means the same. However, this is exactly where you go wrong. Both saving and investment are based on different ideologies and serve different purposes. A careful perusal is what’s needed in the first place before you decide on choosing the best saving policy. And at Canara HSBC Oriental Bank of Commerce Life Insurance, you can choose the best saving plans for yourself to save or invest.

Know the difference

The fundamental aspect of saving and investing money is to understand what comes first.

Saving money is the act of parking the cash in safe and liquid accounts or securities. Whereas, investing money is the act of using it to buy a productive asset-backed by some safety. Stocks, bonds, or even real estate makes for effective investment tools.

Now that their difference is understandable, the next major question would be when to save or invest and how much to save or invest. Saving comes before investment as a golden rule. Only when you have enough money saved to cater to your needs, you should think of investing it.

Best saving policy and plans

To save for a secure and safe future is a habit that is always encouraged. You might feel confused as you come across different policies and plans that provide you with the best way to save your wealth. However, at Canara HSBC Oriental Bank of Commerce Life Insurance, you would be assured that your savings are put into the best policies and plans that allow you to make disciplined savings.

It has the best savings and investment plans and policies be it traditional investment plans or the new-age and current policies.

If you are someone who goes by the traditional investment plans, Canara HSBC Oriental Bank of Commerce Life Insurance has you covered. These plans are conventional and different from the unit-linked insurance plans. There is no role of capital markets; hence, no market linkage. The insurance laws govern the working of such policies.

These plans require money to be locked-in for almost 10-20 years, and there is no way to withdraw the amount before the term gets over.

However, if you are looking for comparatively modern plans in their approach, then Canara HSBC Oriental Bank of Commerce Life Insurance provides its customers with various saving plans and policies that suit the distinct needs of each customer. Saving plans resemble life insurance products and yield steady returns throughout the term.

The possibilities that they provide for you to save your money are immense.

Canara HSBC Oriental Bank of Commerce Life Insurance helps you grow your money and accomplish your financial goals through a systematic investment procedure. The returns are payable to the beneficiaries depending upon their needs and the preferred plan.

Nonetheless, saving plans also aim to offer their customers tax benefits, terminal illness benefits, and also cover death benefits. These life insurance plans are futuristic and promise nothing but financial security for your family.

However, before choosing the best saving policy, remember to be sure of the following factors that ought to determine your decision to save in a particular plan/policy:

  • Risk parameter
  • Investment tenure
  • Final objectives
  • Flexibility
  • Specific plan attributes
  • Minimum costs/charges

Why choose Canara HSBC Oriental Bank of Commerce Life Insurance for the best Saving Policy?

  • It is the trusted choice of India’s leading public-sector banks and individuals seeking to secure their families’ future.
  • It caters to the needs of those who place their financial reliance on such policies. It supports the new age necessities of people.
  • It provides all-inclusive life insurance policies to initiate a smooth premium payments process as well as claiming process.
  • With years of experience and expertise, Canara HSBC Oriental Bank of Commerce Life Insurance has a huge family of happy and satisfied customers worldwide.

The best saving policy will aid you in achieving the following goals:

  • Standard and regular savings
  • Assured returns
  • Tax benefits
  • Incentives in the form of bonus
  • Life covers that provide you with an additional level of security
  • Makes it easy to avail secured loans against the policy

Types of Savings Plans and Investment Plans offered by Canara HSBC Oriental Bank of Commerce Life Insurance

1. Endowment plans

  • These kinds of plans blend both life insurance and savings, thereby allowing the policyholders some regular savings.
  • These plans are the most traditional ones available in the country.
  • The key highlight of such plans is that if the policyholder lives through the term period of the policy, he would be eligible to get paid a lump-sum amount at maturity. On the other hand, if the policyholder dies before the policy term gets over, his beneficiaries must be paid the entire sum of money assured by the policy.
  • If you want to invest in an endowment savings plan that makes it easier for you to achieve your goals by saving regularly and gives you assured returns unbothered by the market fluctuations, then the Guaranteed Savings Plan offered by Canara HSBC Oriental Bank of Commerce Life Insurance would be the appropriate choice.
  • Another such plan that focuses on wealth creation and has specifically been designed to support your needs through each stage of life is the Smart Lifelong Plan.

2. Money-back plans

  • These plans are closely similar to the endowment plans such that these are also a mix of insurance and savings.
  • However, the basic difference is in the manner of paying the benefit. These plans do not pay a lump-sum amount at maturity. Instead, they pay the assured sum at periodic intervals. If the policyholder survives the policy term, he stands eligible to be paid the balance sum. However, if he dies before the policy term ends, his beneficiaries get paid the complete sum assured irrespective of previous payouts.
  • This policy’s basis is to provide flexibility and freedom to the policyholder to use his savings if he wishes to.
  • What makes it the best savings plan is that it provides liquidity, life insurance cover, and security unfettered by market fluctuations.

3. Unit-linked Insurance plans

  • Under these plans, you can make any modifications in the entire sum assured, anytime during the policy term.
  • These plans provide an alternative to the policyholder to choose between linear, increasing, or decreasing sum assured. Similarly, premium payment can also be modified, and the policyholder again has a choice to choose if they wish to pay monthly, quarterly, half-yearly, or annually.
  • ULIPs are designed to cater to the distinct financial objectives of each policyholder. There are three types of savings plans under this category; single/regular premium plans, life stage-based/non-life stage-based, guarantee/non-guaranteed plans.
  • The most credible saving policy plan is the Canara HSBC Oriental Bank of Commerce Life Insurance Invest 4G Plan. It allows the policyholder an opportunity to choose for the best possible plan and save for the future while maximizing his savings by adding back to it in the form of Loyalty Additions and Wealth Boosters.
  • Titanium Plus Plan is a similar one that promotes protection and investment, thereby boosting your savings. It is equally flexible and allows modifications too.

Your rationale behind saving and investing might be different. Both the new ULIP savings schemes and the traditional plans offer distinct benefits in their capacity. ULIPs focus on wealth creation by encouraging capital markets’ involvement while traditional policies go unaffected by the same and make for a safer alternative. However, to each on its own. What is necessary here is to know the correct balance between saving and investing. With the best saving policies from Canara HSBC Oriental Bank of Commerce Life Insurance, you get to choose the one that matches your aspirations and expectations.

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Frequently Asked Questions

What is saving plan?

A savings plan is likely to be different for everyone depending on the financial goal, risk profile, returns, and investment horizon. If you are young and want to save for your retirement, ULIPs like Invest 4G or Titanium Plus plan would be the best option. You are likely to create a large corpus by your retirement through market-linked returns if you invest in this savings plan. If capital protection is your aim, then traditional insurance plans such as Guaranteed Money Saving Plan should be suitable for you.

Who should invest in a Savings Plan?

If you are looking for a guaranteed income plan, then saving plans should be on your list of investments that you are planning to make. Savings plan require you to invest a pre-decided amount on a regular basis. People with a regular stream of income who require a lump-sum amount after a period should opt for a savings plan. Working professionals, self-employed people and businessmen should consider a savings plan to meet their long-term financial obligations. Saving plans are also ideal for people who are risk-averse and want to accumulate funds through relatively safer mediums. These saving plans inculcate financial discipline in policyholders which make them crucial for every portfolio.

How much money should you put in savings each month?

The amount that should be invested in a savings plan each month depends on the income, existing financial obligations and the long-term financial goal. If you have a steady income, you should save at least 20% of your monthly income. It is not necessary to invest your entire money into a savings scheme as investments should be diversified. Ideally, you should aim to have a financial buffer of over 10 times of your annual income. Choose an income plan based on your financial circumstances to stay afloat.

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What is the difference between saving and investing?

Saving is the money that you keep aside for emergencies or for buying any big-ticket item. Investing means growing or multiplying the wealth that you have by buying savings plan, or any other assets. Buying a savings plan will help you in achieving your investment goals such as retirement, your child’s higher education or marriage, or for buying a new house.

Which savings plan is best for retirement?

The Invest 4G plan with its multiple investment options and various portfolio management strategies for capital protection is an ideal saving plan for retirement. Also, Guaranteed Income4Life is also another savings plan that you can consider for building your retirement corpus as it acts as a guaranteed income plan that will provide you maturity benefits to manage your post-retirement expenses.

Which savings plan is best for long-term goals?

Smart Goals Plan is a savings plan with its unique features such as modification of the sum assured partial withdrawal and fund switch can help you plan for your long-term financial goals. Canara HSBC Oriental Bank of Commerce Life Insurance offers a wide variety of saving plans that you can invest in as per your risk appetite and investment goal.

Which savings plan is suitable for girl child?

The Future Smart unit-linked plan from Canara HSBC Oriental Bank of Commerce Life Insurance is the ideal savings plan for the girl child. Monthly Income Advantage Plans are also a good option if you are planning to invest in a savings plan for your girl child.

Where should I invest my money?

You should spread your investments across financial instruments. However, having the best savings cum guaranteed income plan in your portfolio is extremely important. Savings plan ensures financial stability and also helps in fulfilling short, medium and long-term monetary goals.

What is a monthly income advantage plan?

A monthly income advantage plan ensures that you lead a stress-free life with your loved ones as it provides a life cover along with giving you guaranteed monthly income. In short, it is a life insurance and income plan that will financially secure commitments made to your loved ones. Canara HSBC Oriental Bank of Commerce Life Insurance Guaranteed Income Advantage Plan is a monthly income advantage plan that provides life cover for the entire term while you pay premium only for a limited period.

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What is a good age to start saving money?

When you plan to invest in a financial product, it always pays well to start early. The earlier you start saving and investing, the better. When you start investing early, the capital gets adequate time multiply. Even a small amount invested for a long time can give substantial returns due to compounding in a savings plan. Invest in an income plan as early as possible to build a significant corpus that will later help you in life. Ensure that you buy the best saving plan in India that can be aligned with your investment goals.

Should you use a savings plan for retirement planning?

Yes. Retirement planning is one of the most important financial decisions of our lives. The best saving plan offers a host of features that may help you build your retirement corpus. Some of the saving plans like Guaranteed Income4Life offer guaranteed returns at policy maturity. Such returns can act as a regular income stream even after your retirement to help you stay financially stable.

Are saving plans beneficial for managing unexpected expenses?

Yes. Best saving plans in India offer partial withdrawal system that can be utilized during your rainy days. Being financially prepared to tackle such odds will help you manage any unforeseen expenses in a smooth manner. Buy a monthly income advantage plan that will generate a steady source of income for you to take care of both long-term and short-term financial goals.

How to save tax by using savings plan?

Saving plans are known for helping us achieve our financial goals. Best saving plans allow you to grow your wealth while providing life cover. Saving and investment plans are also beneficial for tax planning. Premiums of savings cum protection plans come with tax benefit under Section 80C of the Income Tax Act. Moreover, proceeds received upon the death of the policyholder or upon the maturity of the policy are tax free under Section 10 10(D).

What is the right age to start saving money?

When you plan to invest in an income plan, it always pays well to start early. The earlier you start investing in a savings plan, the better. When you start investing early, the appreciation in capital is significant. Even a small amount invested in the best saving scheme for a long time can give substantial returns due to compounding. Buy the best savings plan as soon as you start earning to achieve all your milestones on time.

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How a savings plan can help in building your child’s education fund?

Saving plans help in building wealth over time against the investments that you make. Buy the best savings plan to build an education fund for your child. The best saving plan for kids offered by Canara HSBC Oriental Bank of Commerce Life Insurance eases the stress of planning your child's future by providing a lump-sum payout on the investment. Consider investing in a monthly income advantage plan to assist you in fulfilling your financial goals.

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How Savings Plans by Canara HSBC Oriental Bank of Commerce Life Insurance can help you?

Every person has a unique reason to save and invest. With ULIP savings schemes, the company caters to people seeking wealth creation through capital appreciation. Contrarily, the traditional plans can help you save for important life goals without worrying about the fluctuation in fund value. All major savings plan offers partial withdrawal facility that can help you take care of unplanned contingencies. With savings plans from Canara HSBC Oriental Bank of Commerce Life Insurance, you get adequate flexibility while investing and receiving the savings benefits, which makes them a good investment choice for investors looking for income plans.

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