When it comes to money, no amount is small. Thus, if you save Rs.10000 by the end of a month, you just can’t imagine how much scope you have to grow this into a bigger future corpus.
In this article, let’s explore four good ways in which you can expend your month-end savings of Rs. 10000 to earn you attractive long-term returns:
Get yourself a life insurance policy
Life is the most precious thing but has lots of risks and uncertainties associated with it. Some you can control but others are beyond your control. That said, if you are the major breadwinner of your family, you need to explore every way of mitigating life risk. The best way is to plan a life insurance investment. Let’s say you are a young salaried employee in your early 30s. If you invest now in a term insurance cover of Rs. 1 crore, you can do that by paying an annual insurance premium of about Rs.10000. This way, you will secure the financial future of your family even when you are not there due to an unfortunate circumstance. Moreover, you will save on taxes through deduction under sec 80C for the insurance premium.
Invest in a health insurance cover
Health is wealth indeed, especially in a stress-driven society. In India, medical emergencies are touching the roof and one hospitalization can take a heavy toll not only on your savings, but can also affect your future corpus that you would want to accumulate for retirement. This is when a health insurance policy comes in handy both for you as well as your dependents, if you go in for a family cover. Generally, a family floater health plan for around Rs.5 lakhs can be invested in at an annual premium of Rs.7000-10000. Just like life insurance, you get a tax savings advantage under sec 80C. Moreover, health insurance cover ensures you are covered for medical emergencies, which will help you save all the money that you would have otherwise spent on hospitals and treatment.
Mutual fund SIP
In case you already have your life insurance and health insurance policies in place, you can think of equity mutual funds SIP as a good investment option. In the long term, equity MF SIPs have the potential of providing you with inflation beating returns to help build your planned retirement corpus. You can invest in small monthly amounts but need to stay investment for a long-term horizon of 10-15 years or at least 3-5 years to see the results. Investment of Rs.10000 in equity SIP compounded at 12% returns per annum for a 5-year horizon gets you about Rs.7.5 to 8 lakhs, which almost doubles in 8 years to about Rs.15 to 16 lakhs.
Invest your money in corporate fixed deposits
In case you are a conservative investor, think about traditional bank FDs. However, returns from investing in corporate FDs are in the range of 9% and more, which is useful in building your corpus.
Thus, you have seen what you can do with Rs.10000 month-end savings. If you feel you need help, don’t hesitate write us at [email protected]