Why Do You Need Savings and Investment Plans in India?

Written by : Knowledge Centre Team

2026-08-07

1187 Views

6 minutes read

Introducing BSE 500 Enhanced Value 50 Fund with Promise4Wealth

50 High-Potential Companies, One Smart Decision

Name is required Name should be Valid

Mobile Number is required Mobile Number should be Valid

Email is required Email should be Valid

DOB is required DOB should be Valid

Annual Income*

< 3 3-5 5-7 7-10 > 10

Annual Income is required

I agree that even if my contact number is registered with NDNC / NCPR, I would still want the Company to contact me on the given number and email id for the clarifications/product information sought by me and agree that I have read and understood the Privacy Policy and agree to abide by the same.

Please tick to proceed further.

Thank you for your interest in our product. Our financial expert will connect with you shortly to help you choose the best plan.

Savings and investment plans play an essential role in helping you achieve both short-term and long-term financial goals. There are various savings plans available, and you may choose the plan based on your goals and financial capabilities. The objective of investing in a savings plan is to build a corpus for emergencies or for fulfilling life goals.

There is a misconception that investment planning should only be done when a person has an additional stream of income. However, this is not true. You should start investing as soon as you start earning, keeping in mind the result of compounding. The longer you stay invested in any savings plans, the more your chances of growing your wealth. This is one of the core benefits of saving money early.

Let us dig deeper and understand what saving and investment plans are and the major reasons you should buy such plans.

Key Takeaways

Investing early lets compounding work in your favour; you don't need extra income to start saving today
Choose your savings plan duration based on short-, medium-, or long-term financial goals, not a fixed rule
Government schemes like SSY, PPF, and NSC, along with SIPs, are reliable ways to build long-term wealth
Savings and investment plans offer financial protection, tax benefits, and help you reach life goals
Match your investment type to your goal: FDs for short-term, mutual funds for medium, equity for long-term

Build Guaranteed Savings for Your Future Goals

Full Name* Please enter correct name Please enter the Full name

Mobile Number* Please enter valid mobile number Please enter Mobile Number

Email* Please enter valid email Please enter Email

By submitting my details, I request the company to call me and override my NDNC/ NCPR registration and authorize the Company and its representatives, including its third-party vendors, to validate, evaluate and process this proposal and also to contact me via email, phone, WhatsApp or any other mode. I also provide my consent to share my IP address & location to the company for risk assessment. I confirm that, I have read and understood the Company’s Privacy Policy and agree to abide by it

...Read more Consent is required

What are Saving and Investment Plans?

Saving and investment plans help you accumulate funds over time. Depending on the type of financial goal you have – short-term, mid-term, or long-term - you can choose the investment period. There is no fixed rule that you must stay invested in a savings plan for at least 5 years; the ideal duration depends on your goal

Different goals require different periods of investment; hence, you should choose the right type of plan and the duration you want to remain invested.

What is a Savings Plan?

A savings plan is a financial product that helps you set aside a portion of your income regularly to build a corpus over time. It typically prioritises safety and capital protection over high returns, making it ideal for short-term goals, emergencies, or building a financial cushion.

Did You Know?

More than 80% of Indian adults now have a formal financial account, up from roughly 50% in 2011

Source: DDNews

What is an Investment Plan?

An investment plan, on the other hand, is designed to grow your money over the medium- to long-term by investing it in market-linked or growth-oriented instruments. While investment plans usually carry a higher degree of risk than savings plans, they also offer the potential for higher returns, making them suitable for long-term wealth creation.

Types of Saving and Investment Plans

Basically, there are various types of savings and investment plans. These can be broadly grouped into savings options, which prioritise safety and stability, and investment options, which prioritise wealth creation over time. Listed below are some plans you may consider to strengthen your financial planning.

Savings Options: If your priority is safety and predictable returns, the following savings options are worth considering:
1. Savings Accounts: A savings account is the most basic and accessible savings instrument, offered by banks and post offices, that allows you to deposit and withdraw money while earning a modest interest rate. It offers high liquidity, making it suitable for maintaining emergency funds or managing short-term cash needs.
2. Government Savings Schemes: From time to time, the Government of India introduces savings schemes for Indian citizens. There is a wide variety of government-introduced savings schemes that may help you reach your retirement or savings goals.
  
  For example, if you want to secure the future of your daughter, you may choose to invest in Sukanya Samriddhi Yojana (SSY), while if you wish to secure your retirement, you may put your money in Public Provident Fund (PPF) or National Savings Certificate (NSC).
3. Fixed Deposits (FD): A Fixed Deposit is a savings instrument offered by banks and NBFCs where you invest a lump sum for a fixed tenure at a predetermined interest rate. FDs are popular for their safety and guaranteed returns, making them a preferred choice for conservative, short- to medium-term savings goals.
Investment Options: If you're looking to grow your wealth over the long term and can take on a degree of market risk, consider the following investment options:
1. Stocks: Stocks, or equity shares, represent partial ownership in a company and allow investors to participate in its growth and profitability. While stocks have the potential to deliver higher long-term returns, they also carry higher market-linked risk and require careful research or professional guidance.
2. Bonds: Bonds are debt instruments issued by governments or corporations to raise funds, where the investor lends money in exchange for periodic interest payments and repayment of the principal at maturity. Bonds are generally considered lower-risk compared to stocks, making them suitable for investors seeking stable, fixed income.
3. Systematic Investment Plan (SIP): A Systematic Investment Plan (SIP) is a mode of monthly investment plan wherein the investor puts the money in mutual funds. You can invest as little as ₹500. This savings and investment plan allows disciplined savings.
  
  Know more about a systematic investment plan

Why Should You Buy a Savings and Investment Plan?

Some say a “penny saved is a penny earned”, while others say that we need to “save for the rainy day.” Both statements are true and underline the importance of savings and investment in everyday life. Besides primary needs, human beings have dreams, desires, and plans that can only be achieved if we save.

Imagine this scenario. Anand earns a salary of ₹1 lakh per month, but at the end of the month, he has nothing left. He has no savings and therefore no investments. If he goes on this way, Anand will never be able to secure his future or his loved ones'.

If you are not saving or investing, you are earning but not generating wealth. Therefore, unless you are saving or investing, it doesn’t matter if you earn ₹10,000 or ₹1 lakh per month. Here are a few benefits of savings plans and the advantages of saving early:

Financial Protection: When you invest in a savings plan, you gain financial protection through its benefits. If you have invested in a life insurance cum savings plan, the beneficiaries of the plan will get the death benefits if the policyholder passes away during the term of the policy. That way, your family is protected financially.
Tax Advantage: Most savings and investment plans offer tax benefits under Section 123 of the Income Tax Act, 2025 (formerly Section 80C) along with the deductions under Schedule II (Table S.No. 2) of the Income Tax Act, 2025 (formerly Section 10(10D)), subject to applicable conditions.
Life Goals: Saving and investment plans also help you in achieving life goals. As these plans allow you to save over a long period of time, you build a corpus that eventually helps you achieve the life goals you set for yourself more easily.

Conclusion

If you want to create long-lasting wealth, you should select the right savings and investment plan and start your investment journey as early as possible. Remember, both saving and investing play a role; saving builds your safety net, while investing helps your money grow faster than inflation. When you decide to invest, you should have short-term, medium-term and long-term goals with different time frames. For short-term goals, consider bank Fixed Deposits; for medium-term goals, mutual funds are a common choice; and for long-term goals, equity or equity-linked instruments are typically favoured for their growth potential.

Whichever path you choose, the earlier you start, the more time your money has to compound, so don't wait for the "right moment" to begin. It rarely comes on its own.

Glossary

Sukanya Samriddhi Yojana (SSY): A government savings scheme for a girl child's future, offering high interest and tax benefits
Public Provident Fund (PPF): A government-backed, long-term savings scheme offering tax benefits and guaranteed returns
National Savings Certificate (NSC): A fixed-income government savings certificate offering guaranteed returns and tax deductions
Systematic Investment Plan (SIP): A mode of investing a fixed sum in mutual funds at regular intervals, building wealth steadily
Corpus: The total accumulated sum of money built through regular savings or investments over time

FAQs

A savings and investment plan is a financial product that helps you set aside money regularly while also growing it over time, combining the safety of saving with the wealth-building potential of investing. It helps you build a corpus for both near-term needs and long-term goals.

A savings plan offers financial protection for your family, tax benefits under applicable provisions of the Income Tax Act, and a structured way to achieve your life goals. It also instils financial discipline by encouraging regular contributions rather than sporadic saving.

A savings plan prioritises safety and capital protection, making it ideal for short-term goals and emergencies, while an investment plan focuses on growing your money over the medium to long term through market-linked instruments. Investment plans typically carry higher risk but offer greater growth potential compared to savings plans.

Savings give you liquidity and a safety net for emergencies, while investments help your money outpace inflation and grow substantially over time. Relying on only one leaves gaps; savings alone may not build enough wealth, and investments alone may leave you without accessible funds in a crisis.

Popular government-backed saving schemes include the Public Provident Fund (PPF), National Savings Certificate (NSC), and Sukanya Samriddhi Yojana (SSY) for a girl child's future. Bank Fixed Deposits and Post Office savings schemes are also widely used for their safety and guaranteed returns.

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.

Who Should Invest In Saving Plans Thum Desktop

Who Should Invest in Savings Plans in India and Why Today?

Compound Interest Beat Inflation Thum Desktop

Guaranteed Savings Plans: Why a Great Idea to Secure Future?

Recent Blogs

Why Do Some People Struggle To Save Money Thum Desktop

Savings and Investment Plans from Canara HSBC Life Insurance

We bring you a collection of popular Canara HSBC life insurance plans. Forget the dusty brochures and endless offline visits! Dive into the features of our top-selling online insurance plans and buy the one that meets your goals and requirements. You and your wallet will be thankful in the future as we brighten up your financial future with these plans.

Fixed Returns, Zero Risks & Worries

iSelect Guaranteed Future Plus

4 Plan Options
Life cover + Guaranteed benefits
Accidental death benefit
Premium protection cover

Save, Dream, Plan. Live Peacefully

iSelect Guaranteed Future Plan

4 plan options
Guaranteed Maturity Benefit
Premium Protection Cover
Tax Benefits

Why You Should Have Savings & Investment Plans?

Key Takeaways

Build Guaranteed Savings for Your Future Goals

Enter OTP

Application Status

Name

Date of Birth

Plan Name

Status

Unclaimed Amount of the Policyholder as on

Name of the policy holder

Policy No.

Address of the Policyholder as per records

Unclaimed Amount

Request Registered