Savings Plan

Savings Plan

A well-designed savings plan is one of the most important tools for achieving your financial dreams. It allows you to save money consistently for an emergency, or to fund your dreams, whether it is to take a long international vacation, plan for your child’s higher education, or some other worthy objective.

Protect your family’s future with a life insurance savings plan. Secure your dreams and your family’s future with a savings plan. Get started now.

Retirement planning
Risk diversification
Family protection
Goal-oriented savings
Child education funding
Tax benefits*

What is a Savings Plan?

It is a financial tool that helps individuals save money in a systematic manner over a period. The money thus saved earns returns in a manner specified by the plan’s terms and conditions. What makes a savings plan distinct from a regular savings account is that the former comes with additional benefits such as life insurance coverage, tax exemptions, and guaranteed returns. A savings plan is ideal for the risk-averse, as it usually comes with low chances of encountering any risks to the money invested into it. Such plans encourage disciplined savings habits and help individuals meet long-term financial goals such as retirement, children’s education, or buying a home.

Whether you opt for a fixed deposit (FD), Public Provident Fund (PPF), or an endowment plan, the best savings plan ensures that your money grows safely with minimal risk.

How Does a Savings Plan Work?

A savings plan works by allowing you to contribute a fixed or flexible amount regularly (monthly, quarterly, or annually) over a set period. The money is then invested in low-risk instruments such as government bonds, debt funds, or fixed-income securities, to ensure its steady growth.

A savings plan will have the following aspects:

Savings Plan	Returns/Interest Rate	Lock-in Period/ Maturity Period	Minimum Investment	Maximum Investment	Tax Benefits
Fixed Deposits (FDs)	Depends on the bank/ financial institution.	7 days to 10 years.	₹1,000	No upper limit (usually)	Taxable interest; 80C benefit available for tax-saver FDs.
Recurring Deposits (RDs)	Depends on the bank/ financial institution.	6 months to 10 years	₹100/month	No upper limit (usually).	Taxable interest.
Post Office Savings Scheme	4.00% p.a.	No lock-in	₹500	No upper limit	Interest up to ₹10,000 exempt from taxes.
Endowment Plans	Depends on the financial institutions.	Varies; may not be applicable for some plans.	Varies by insurer.	Varies.	Eligible for Sections 80C & 10(10D) benefits.
Public Provident Fund (PPF)	7.1% p.a. currently.	15 years	₹500	₹1.5 lakh/year	Tax-free under Section 80C and exempted from maturity.
Sukanya Samriddhi Yojana (SSY)	8.2% p.a. currently.	For 21 years from the date of investment	₹250	₹1.5 lakh/year	Tax deduction up to ₹1.5 lakh under Section 80C. Tax-free interest and maturity proceeds.
National Pension Scheme (NPS)	11-20% annualised returns (market-linked).	Until age 60	₹500 for opening the account and ₹1000 for keeping the account active.	No upper limit	Up to ₹2 lakh under Sec 80C & 80CCD (for investments made in NPS Tier-1 account), and up to ₹1.5 lakh for Tier-2 accounts of government employees (if the plan has a lock-in period of 3 years).
National Savings Certificate (NSC)	7.7% p.a.	5 years	₹1,000	No upper limit	Eligible under Section 80C.
Kisan Vikas Patra (KVP)	7.5% p.a.	115 months (9.5 yrs)	₹1,000	No upper limit	Not eligible for Section 80C benefits.
Voluntary Provident Fund (VPF)	8.25% p.a.	Five years.	0% - 100% of basic salary	0% - 100% of basic salary	Tax-free under Section 80C; interest also tax-free for contributions up to ₹2.5 lakhs (if invested for a minimum of five years).

Savings Plan

Returns/Interest Rate

Lock-in Period/ Maturity Period

Minimum Investment

Maximum Investment

Tax Benefits

Fixed Deposits (FDs)

Depends on the bank/ financial institution.

7 days to 10 years.

₹1,000

No upper limit (usually)

Taxable interest; 80C benefit available for tax-saver FDs.

Recurring Deposits (RDs)

Depends on the bank/ financial institution.

6 months to 10 years

₹100/month

No upper limit (usually).

Taxable interest.

Post Office Savings Scheme

4.00% p.a.

No lock-in

₹500

No upper limit

Interest up to ₹10,000 exempt from taxes.

Endowment Plans

Depends on the financial institutions.

Varies; may not be applicable for some plans.

Varies by insurer.

Varies.

Eligible for Sections 80C & 10(10D) benefits.

Public Provident Fund (PPF)

7.1% p.a. currently.

15 years

₹500

₹1.5 lakh/year

Tax-free under Section 80C and exempted from maturity.

Sukanya Samriddhi Yojana (SSY)

8.2% p.a. currently.

For 21 years from the date of investment

₹250

₹1.5 lakh/year

Tax deduction up to ₹1.5 lakh under Section 80C. Tax-free interest and maturity proceeds.

National Pension Scheme (NPS)

11-20% annualised returns (market-linked).

Until age 60

₹500 for opening the account and ₹1000 for keeping the account active.

No upper limit

Up to ₹2 lakh under Sec 80C & 80CCD (for investments made in NPS Tier-1 account), and up to ₹1.5 lakh for Tier-2 accounts of government employees (if the plan has a lock-in period of 3 years).

National Savings Certificate (NSC)

7.7% p.a.

5 years

₹1,000

No upper limit

Eligible under Section 80C.

Kisan Vikas Patra (KVP)

7.5% p.a.

115 months (9.5 yrs)

₹1,000

No upper limit

Not eligible for Section 80C benefits.

Voluntary Provident Fund (VPF)

8.25% p.a.

Five years.

0% - 100% of basic salary

Tax-free under Section 80C; interest also tax-free for contributions up to ₹2.5 lakhs (if invested for a minimum of five years).

	Savings Plan	Life Insurance
Main Purpose	Focuses on wealth accumulation through disciplined saving and offers guaranteed or market-linked returns.	Provides financial protection to beneficiaries in case of the policyholder’s untimely demise.
Risk Aspect	Savings plans prioritise returns with minimal possible risk, except for market-linked savings plans.	Pure life insurance (e.g., term plans) offers high coverage at low premiums. They cover the risks to the insured’s life.
Tax Benefits*	Certain savings plans qualify for tax deductions under Section 80C; interest and maturity proceeds are also tax-free for specified products.	Premiums for a life insurance policy are tax-deductible under Section 80C; maturity proceeds are tax-free under certain terms and conditions.
Suitable for	Those looking to build a corpus to meet their and their family’s needs.	Those looking to secure their family’s future.

Savings Plan

Life Insurance

Main Purpose

Focuses on wealth accumulation through disciplined saving and offers guaranteed or market-linked returns.

Provides financial protection to beneficiaries in case of the policyholder’s untimely demise.

Risk Aspect

Savings plans prioritise returns with minimal possible risk, except for market-linked savings plans.

Pure life insurance (e.g., term plans) offers high coverage at low premiums. They cover the risks to the insured’s life.

Tax Benefits*

Certain savings plans qualify for tax deductions under Section 80C; interest and maturity proceeds are also tax-free for specified products.

Premiums for a life insurance policy are tax-deductible under Section 80C; maturity proceeds are tax-free under certain terms and conditions.

Suitable for

Those looking to build a corpus to meet their and their family’s needs.

Those looking to secure their family’s future.

	Savings Plans	Investment Plans
Primary Objective	Savings plans focus on capital preservation and steady growth through low-risk instruments such as FDs, PPF, or endowment policies. They prioritise safety over high returns.	Investment plans (e.g., stocks, mutual funds, real estate) aim for wealth creation by taking calculated risks. They target higher returns but come with market-linked volatility.
Risk vs. Returns	Savings plans usually offer guaranteed or fixed returns. Risk is minimal as funds go into government-backed or debt instruments.	Investment plans provide market-linked returns, which can be higher but are unpredictable. They carry risks such as capital loss or underperformance.
Liquidity & Lock-in Periods	Savings plans often have fixed tenures (e.g., PPF: 15 years, FD: 1-10 years). Premature withdrawals may attract penalties.	Investments such as stocks or mutual funds offer higher liquidity (no lock-in, except in tax-saving ELSS). Note: Voluntary short-term exits may lead to losses.
Tax Implications*	Savings plans such as PPF, SSY, or NSC offer tax-free maturity under Section 10(10D) and deductions under 80C (subject to terms and conditions).	Investment plans have varied tax treatments. The taxation may depend on whether the investments are made in equity or debt options.
Goals and Suitability	Most savings plan options such as FDs and PPF are ideal for short-term goals like vacations and vehicle purchases, and for on-debatable needs such as emergency fund creation. A short-term savings plan will suit conservative investors who need to protect their capital for near-future expenses.	An investment plan is ideal for long-term goals such as children’s education and retirement planning. Long-term investment plans work best for risk-tolerant individuals who want to build wealth over decades and are willing to withstand market fluctuations for the same.

Savings Plans

Investment Plans

Primary Objective

Savings plans focus on capital preservation and steady growth through low-risk instruments such as FDs, PPF, or endowment policies. They prioritise safety over high returns.

Investment plans (e.g., stocks, mutual funds, real estate) aim for wealth creation by taking calculated risks. They target higher returns but come with market-linked volatility.

Risk vs. Returns

Savings plans usually offer guaranteed or fixed returns. Risk is minimal as funds go into government-backed or debt instruments.

Investment plans provide market-linked returns, which can be higher but are unpredictable. They carry risks such as capital loss or underperformance.

Liquidity & Lock-in Periods

Savings plans often have fixed tenures (e.g., PPF: 15 years, FD: 1-10 years). Premature withdrawals may attract penalties.

Investments such as stocks or mutual funds offer higher liquidity (no lock-in, except in tax-saving ELSS).

Note: Voluntary short-term exits may lead to losses.

Tax Implications*

Savings plans such as PPF, SSY, or NSC offer tax-free maturity under Section 10(10D) and deductions under 80C (subject to terms and conditions).

Investment plans have varied tax treatments. The taxation may depend on whether the investments are made in equity or debt options.

Goals and Suitability

Most savings plan options such as FDs and PPF are ideal for short-term goals like vacations and vehicle purchases, and for on-debatable needs such as emergency fund creation. A short-term savings plan will suit conservative investors who need to protect their capital for near-future expenses.

An investment plan is ideal for long-term goals such as children’s education and retirement planning. Long-term investment plans work best for risk-tolerant individuals who want to build wealth over decades and are willing to withstand market fluctuations for the same.

Documents Required to Buy Savings Plans

To purchase a savings policy, you will need the following documents:

1. Policy Application Form

Fill out the company's policy form with preliminary details about yourself, your finances, and your health, amongst other things. Your premium and coverage amount (sum assured) are determined based on this information.

2. Income Proof

It is required to confirm your ability to pay premiums. Submit bank statements, salary slips, or Income Tax Returns (ITR), as required.

3. Identity & Address Proof (KYC Documents)

Provide any of the following valid government-issued IDs:

Passport (Identity + Address Proof)
Voter ID (Identity + Address Proof)
Driving License (Identity + Address Proof)
Aadhaar Card (Identity + Address Proof)

Understanding Savings Plans

Investing in Savings Plans

Savings Plans & You

Savings Plans for Future Needs

Choosing a Savings Plans

Managing a Savings Plans

Why are savings plans important?

Answer: A savings plan is important for the following reasons:

Affordable Goals: It helps make long-term, high-investment goals achievable.

Financial Security: Provides financial security for dependents in case of unforeseen events affecting the breadwinner.

Systematic Growth: Grows savings systematically and securely with risk-free assured returns.

Additional Income: Offers a regular income stream alongside earned income, leading to a better quality of life.

Tax-Free Returns: The returns are tax-free, adding to your income.

Flexible Payments: Flexible premium payment options allow for better financial management.

Are savings plans different from investments?

Answer: Yes, they serve different purposes. A savings plan will emphasise capital protection with modest but steady returns, while investments aim for higher growth through participation in the market.

Are savings plans risk-free?

Answer: Savings plans are generally low in risk but not completely risk-free. Government-backed options such as PPF and FDs carry minimal risk, as they offer guaranteed returns. Market-linked plans, such as ULIPs come with market risks (depending on the type of funds you choose). The key is to choose savings plans matching your risk tolerance and verifying the provider's credibility before investing to ensure the safety of funds.

How are savings plans better than savings accounts?

Answer: Savings plans typically offer higher returns than a savings account, in addition to providing major tax benefits. They also encourage disciplined long-term saving and discourage frequent withdrawals. You can accumulate more wealth over time for important financial goals.

Are savings plans the best way of saving money? Why?

Answer: For risk-averse investors, savings plans can be the best way to save money for the future, as they offer capital protection, tax efficiency, and guaranteed returns. Their structured approach helps maintain discipline with one’s savings journey and is essential for long-term wealth creation.

Am I too young/too old to start a savings plan?

Answer: It is never too early or too late to start your savings plan journey. Young adults benefit most from compounding. Even small, regular contributions to a solid savings plan can grow over 30-40 years. The key is choosing age-appropriate plans that match the time horizon for your goals.

When is the right time to buy savings plans?

Answer: The best time to buy a savings plan could be today, tomorrow, or any day, as long as it is as early as possible to make the most of compounding benefits. For immediate needs, consider short-term options such as FDs. For long-term goals, PPF or NPS may work better. Starting early allows smaller regular contributions to grow substantially over time.

Is life insurance with savings plans right for me?

Answer: Also called endowment policies, these plans can be suitable if you are seeking a balanced approach that provides both protection and steady growth. A savings-insurance plan will offer the advantage of guaranteed maturity benefits along with life coverage. It is ideal for conservative investors who value financial security.

Are savings plans right for me?

Answer: Savings plans suit you if you prefer low-risk options with steady returns, need tax benefits under Section 80C, and want to create a disciplined savings habit. They are particularly suitable for salaried individuals and those with a fixed income looking for secure investments. *

Will savings plans help me with retirement goals?

Answer: Yes, long-term options that offer tax-free growth can be ideal for retirement. Their compounding effect over decades can build a substantial retirement corpus, which can help you meet your goals with ease. Annuity plans are also ideal for post-retirement income generation (as they come with regular payouts).

Can I use savings plans for my child future?

Answer: Yes, you can. Sukanya Samriddhi Yojana (for girls) offers 8.2% returns specifically for this purpose. Endowment plans also work well as they provide guaranteed maturity amounts, which can be perfect for funding education or marriage expenses. Make sure you time your savings plan’s maturity to match these future needs.

Are savings plans long-term or short-term?

Answer: Both options exist to match different needs. Short-term plans (1-5 years) include FDs and RDs, while long-term options (10+ years) feature endowment plans, PPF, NPS, and SSY. The choice depends on your specific financial goals and time horizons.

What is a guaranteed savings plan?

Answer: A guaranteed savings plan provides assured returns regardless of market conditions. Examples include PPF, fixed deposits, and endowment policies. A guaranteed savings plan can be ideal for conservative investors who prioritise the protection of their capital over high returns and want safe, predictable growth for their financial goals.

How to compare savings plans?

Answer: When comparing savings plans, you need to factor in four main factors: interest rates/returns, lock-in periods, tax benefits (Section 80C eligibility, Section 10 tax exemptions, etc.), and liquidity options. Also factor in the charges and taxes (as they will affect your overall returns).

Which savings plan is the best?

Answer

There is no specific ‘best savings plan’ or ‘best way to save money for the future’. You need to review your needs and choose an option accordingly.

Consider:

PPF/NPS for retirement planning
Sukanya Samriddhi Yojana for a girl child's future
FDs/RDs for short-term goals
Endowment plans - insurance protection + wealth accumulation.

Diversifying across multiple plans often works better than relying on just one savings plan.

Can I invest in multiple savings plans?

Answer: Yes, you can. A diversified approach that includes PPF (long-term), FDs (short-term), endowment plans (for insurance protection), and even gold investment plans (for hedging against inflation) can help balance safety, liquidity and growth. The strategy also lets you optimise different tax benefits available under various schemes.

Do I need to review my savings plans?

Answer: Yes, it is important to review your savings policy every 3-5 years in order to ensure that your savings plan remains in line with changing life circumstances such as marriage, children, career shifts, or approaching retirement. If needed, consider rebalancing things a bit to help maintain an optimal mix of safety and growth potential.

How often should I review my savings plan?

Answer: You should review your savings plan annually to assess its performance, verify whether it aligns with your changing goals, and rebalance it if needed. Major life events (such as a change of job or the addition of a new family member) should lead to immediate reviews for ensuring that your savings strategy evolves with your changing circumstances and priorities.

Can I change the amount of my contribution to a savings plan?

Answer: It depends on the plan. Many plans allow flexibility. However, some plans have fixed contribution structures. Verify the terms before you commit.

What is a Savings Plan?

How Does a Savings Plan Work?

Key Features of Savings Plans

Wealth Accumulation

Tax Benefits

Guaranteed Returns

Flexibility in Contributions

Low Risk

Defined Term Duration

Wide Range of Options

Retirement Planning

Customisable Investment Options

Risk Diversification

Financial Protection for Loved Ones

Liquidity Options

Goal-Oriented Savings

Loan Facilities

Loyalty Additions

Accelerated Death Benefits

Bonus

Benefits of the Best Savings Plan

Consistent Savings Habit

Tax Exemptions

Planning for Personal Goals

Built-in Life Cover

Hedging against Inflation

Serves Multiple Purposes

Suitable for Various Profiles

Types of Savings Plans

Fixed Deposits (FDs)

Recurring Deposits (RDs)

Post Office Savings Scheme (POSS)

Endowment Plans

Public Provident Fund (PPF)

Sukanya Samriddhi Yojana (SSY)

National Pension Scheme (NPS)

National Savings Certificate (NSC)

Kisan Vikas Patra (KVP)

Voluntary Provident Fund (VPF)

Are Savings Plans the Same as Life Insurance?

Who Should Get a Savings Plan?

How To Choose the Right Savings Plans for You?

1. Be Clear About Your Financial Goals

2. Know Your Risk Appetite Well

3. Compare Returns & Lock-in Periods

4. Check Liquidity & Withdrawal Flexibility

5. Evaluate Tax Benefits*

How Are Savings Plans Different from Investment Plans?

Are You Eligible to Buy Savings Plans?

Age Criteria

Health Criteria

Financial requirements

Factors To Consider When Buying Savings Plans

Financial Goals and Time Horizon

Risk Appetite

Returns & Interest Rates

Liquidity & Lock-in Periods

Tax Benefits*

Credibility of the Institution

Additional Benefits

How to Buy a Savings Plan from IndiaFirst Life?

Step 1

Define Your Investment Goals & Choose a Plan

Step 2

Determine Premiums and Coverage

Step 3

Decide Benefits, Riders, and Add-Ons

Step 4

Payment and Confirmation

Documents Required to Buy Savings Plans

1. Policy Application Form

2. Income Proof

3. Identity & Address Proof (KYC Documents)

Why Choose a Savings Plan from IndiaFirst Life

Income Flexibility

Long-Term Security

Life Cover

Secure Continuity with Waiver of Premium

Short-Term Payments, Long-Term Gains