Savings Plans types

Savings Plans

Savings plans assist each individual in securing a clean financial protection as well as in attaining financial goals. The savings plans differ from person to person, depending on factors such as needs and budget.

Savings plans types are broadly categorized as:

Emergency Savings Plans- are the funds that come handy in unexpected events encountered, such as home appliances or car repairs and also medical expenses. These savings could be put into use by checking the accounts. The emergency saving plans are the savings that facilitates in withdrawing money immediately in case of emergency. You can also set a limit for such savings so that when the limit gets crossed, the surplus amount can be transferred to savings that are goal-oriented.

Goal Oriented Savings Plans – are the savings aimed at funds generating to meet some specific goal, namely purchasing high priced items such as a house or a car or going on a vacation. Such plans involve savings funds yielding high returns.

However, to facilitate the funds availability to achieve your goals, you can make proper use of the bonds and deposit certificates than touching the savings account.

Retirement Savings Plans- are the plans focused for the post retirement period. You can receive these savings when you stop workings and deposit such that you receive it in a regular stream.

Kids’ Education Savings Plans- involves saving for your kid’s education. You can initiate this education saving immediately from your child’s birth and this can be done by contributing a fixed amount every month. This plan also assists in tax saving.

Short-Term Saving

Short-term savings include:

• Savings Accounts that pays interest on deposits and also restricts the number of withdrawals in a month.

• Certificates of deposits demand making a certain deposit for a fixed period. These certificates of deposits ensure higher returns in comparison to the savings accounts. Conversely, withdrawing money prior to the fixed period invites penalty.

• Money Market Deposit Accounts offer high interest rates, but should always maintenance a minimum balance.

• Government Tax saving bonds are tax-free and are available at a fixed maturity period. They are safe as they are issued by the government.

• Endowment Savings Plan enables saving money for longer term, besides receiving the life insurance benefits. The assured sum is paid in addition to the accrued bonuses as a lump sum when the plan matures or if the insured person faces death.

• Long-term savings plans encompass deposits of long-term bank deposits, such as fixed and recurring deposits namely, life insurance and retirement plans.