How would you afford a good lifestyle when you are old and have retired? Would you have strength to continue earning the second income at that age? Alternatively, would you like to depend on someone to take care of your needs? No, right? So, you must start investing in a good pension plan.

The most advertised pension plans are different varieties of annuity plans offered by insurance providers. You decide when the pension starts and what kind of amount will be paid to you on a monthly basis. There is also an option of getting a certain sum paid regularly for a fixed duration regardless of your living tenure. Apart from this, there are other tax-related and financial benefits associated with different insurance products that you will need to inquire about before investing.

A very reliable choice is the National Pension Scheme (India), popularly known as NPS. If you invest in a Tier-I account of NPS, your investment is exempt under Section 80C. However, the pension that you will withdraw from it will be taxable. You will also be liable for Service Tax and other levies.

NPS lets you track the investment value on a daily basis. To open an account, approach a bank, Post Office or any financial institution authorised by the PFRDA (Pension Fund Regulatory and Development Authority).

Start investing early, start investing now and incur a handsome pension amount while you enjoy your Golden Years.

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Bonds, by definition, are debt instruments, investing in which gets you a fixed interest. Either you get the entire interest on maturity of the bond, or you could get it at regular intervals. It varies depending upon the type of the bond, and investor preference. However, it is advisable to not withdraw interest at regular intervals, as it would add to the Principal deposited, thus increasing your maturity amount.

The government issues bonds to finance its expenditure requirements. Both Central and State governments can issue government bonds in India. The government issues a variety of bonds -- Fixed Rate, Floating Rate, Zero Coupon and Capital Indexed, among others.


Why you should invest in them

● These are gilt-edged investments, i.e. they carry practically no risk of default.

● They are long-term securities. Once you invest, you don’t have to monitor constantly.

● The interest is paid at regular intervals, usually half-yearly.

However, out of all governments bonds in India, it is the Capital Gains Bonds that India prefers most. This is because they substantially save tax when you conduct property transactions. These bonds are issued by National Highways Authority of India (NHAI) and Rural Electrification Corporation Limited (RECL).
You can invest a maximum total of Rs. 50 lakh in them. By investing in these bonds within 6 months of your property sale, instead of attracting tax, your investment gets an exemption under Section 54 EC.

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When you want to invest money in a fix deposit (FD), the first thing that comes in anyone’s mind is interest rate. But, you will always notice that smaller financial institutions usually provide higher interest rates higher interest rates on FDs than bigger banks. Following are the few reasons behind it:

Few popular Fixed Deposits

If you compare FD rates, the country’s largest lender, SBI gives 9% interest rates on FDs below Rs.1 crore of one-two year tenure. The second largest lender ICICI offers 8-9% on term deposits for similar tenure. Now, let us analyze what smaller banks have to offer. Laxmi Vilas Bank Ltd offers 9.75% on a fixed deposit of for a similar period, whereas City Union Bank Ltd earns you 9.50% for a similar period.

Why the difference?

Analysts argue that smaller banks find it difficult to source funds. An avenue to create a money market for them is expensive. On the other hand, larger financial institutions have a better command in market since they have better credit ratings. The cost of raising funds for them through short-term paper is difficult for them. Secondly, being smaller institutions they have smaller retail base. Therefore, they try to attract customer more.   

However, choosing a term deposit should not be based only on attractive interest rates. The banking services should be also looked when the investment is long-term specifically. So, if your financial institution is liquidated, you get your ensured amount. 

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All of us spend more than half of our lives earning but in order to make your hard-earned money to work more effectively for you, one has to do financial planning. It starts with a review of your overall profile and planning your financial goals. These goals can include buying a house, saving a fixed amount of money for your child’s education or planning retirement.

The six steps which can help you in achieving your financial goals are namely, listing the financial requirements of future, setting life goals, examining your current financial status and planning a strategy to meet your financial goals.

Decide your financial goals

By viewing each financial decision as a part of your whole financial goal, you can consider its short-term and long-term effects on your life goals. As a result of this, you can also adapt more easily to sudden changes in life and feel more secure that your financial goals are on track.

Get a professional financial advice
The financial planners are not governed by the government. Instead, it regulates planners by the services they provide. For instance, a financial planner that provides insurance transactions is regulated in the form of an insurance agent. Many financial advisers like accountants and investment advisors can also offer the financial services. So, before getting a financial planning service, check if the advisor follows the six-step process mentioned earlier.

Commonly made mistakes in financial planning

The following are some of the common mistakes made by consumers in their approach towards Financial Planning.

• Not setting measurable goals.
• Confusing financial planning with investing.
• Not evaluating the financial plans periodically.
• Thinking that the financial plans are only for wealthy people.
• Expecting unrealistic returns on investment.

Hence, financial planning when done with an authorized financial planner protects you and your family from the financial uncertainties during the times of crisis. It can also help you to secure your present if you assess your current financial situation and plan your future accordingly.

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After you have achieved your financial goals, the unpredictable circumstances such as illness, inflation and unanticipated expenses can decrease the value of your assets. The longer life expectancies and long periods of financial plans make it difficult for you secure even your assured amount. It’s important to think of wealth protection as an important part of financial planning.

Benefits from wealth preservation strategies

A good wealth protection plan in place will help you to prepare a strategy for protecting your assets from any potential damage. It also ensures you the peace of mind knowing that you have made provisions to protect your financial future. The most valuable benefits include:

• The financial future of your family is secure, including the value of your assets.
• You are financially prepared to deal with any sudden illness and financial needs for long-term care.
• The financial stress of your family will be reduced in case of an untimely death or an unpredictable unemployment.
• Your heirs can directly own the assets in case of a sudden demise.

Combine life insurance in your wealth protection plans
The overall wealth preservation strategy should also include life insurance. Along with life insurance, following financial protection plans, can protect the assets you've worked hard to build:

• Estate Planning: Ensures that your earnings are beneficial for you when you are alive and helps you to transfer it to your heirs after your death. 
• Insurance Investing:  Can help in planning your financial freedom in your retirement years.
• Life Insurance: Provides an effective financial cover for members of a family in case of a sudden death.
• Accident and sickness insurance: Prepares you for any accident, disability or critical illness.

Choose the solution that’s right for you

Choosing the financial protection that's right for your circumstances can be challenging. Always see the benefits that a wealth protection plan is giving you. The benefits should not only restrict to the returns after an accident, but it should also give you benefits during the tenure of a plan.  

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