A Guaranteed Savings Plan is typically a non-participating plan that comes with an endowment benefit of a definite amount. After you pay the premiums for the pre-decided tenure, you will get the maturity benefits. The premiums have a fixed interest rate added to them each year, and the bank adds a maturity bonus to the final amount when the term ends. Now, if you add the lucrative tax benefits into the mix, the popularity of these plans can be well understood.
Why invest in Kotak Guaranteed Savings Plan for tax saving?
Investing in a Guaranteed Savings Plan is a great idea when looking for a financial instrument to save on taxes. As per Section 80C of the Income Tax Act, 1961, the premiums paid for a Guaranteed Savings Plan get tax exemption up to 1.5 lakh. That’s not all! So, if you plan to save up on taxes, then you can include a Guaranteed Savings Plan in your portfolio.
Other advantages of getting a Guaranteed Savings Plan
Though tax benefits are the most important advantage of a Guaranteed Savings Plan, it comes with a host of other great features:
The maturity benefits
After the tenure of the savings plan is done, you are entitled to get the maturity benefits as per the premium amount you chose for the saving plan. There is always a minimum maturity value that remains secure. Regardless of the market performance of the plan, you can be assured of getting that maturity value.
Moreover, all the annual additions to the plan make your investment grow even further, and you earn a bigger corpus.
The ability to take loans
Once your policy reaches its surrender value after two years, you can get loans to meet your financial needs. Though how much you can take out as a loan depends on your bank and your credit score, in most cases, you can get at least eighty percent of the plan’s surrender value as a loan. So, if you are in a financial emergency, then your Guaranteed Savings Plan can be a major help in making you tide over the situation.
The feasibility factor
You can invest in Kotak Guaranteed Savings Plan also because of the affordability factor. You will not have to set aside a huge amount every year and stress your finances. All you need is to save up a smaller monthly amount as per your means. Just remember to invest an amount that you can comfortably pay each month without defaulting on the plan.
The bottom line
The tax benefits are clearly one of the many reasons to get a Guaranteed Savings Plan. So, if you want to save up and get a handsome corpus at the end of the term, then choose a suitable Guaranteed Savings Plan for yourself.
Click here to know more about Kotak Guaranteed Savings Plan: https://www.kotaklife.com/online-plans/savings-plan