Taking baby steps towards money management costs very little. It’s the start of a New Year, but we are hurtling towards the end of the financial year. It is time to take stock of your investments for the year, and to buy some more to cover your shortfall. Let us take a look at some insurance and investment options that are very easy on your pocket. So easy, you should buy these for all your family and friends.
PAY Rs 12, GET ACCIDENT COVER OF Rs 2 LAKH
For less than the cost of a fizzy drink, you can participate in the Pradhan Mantri Suraksha Bima Yojna. This offers a personal accident cover worth Rs 2 lakh for individuals aged between 18 and 70. This cover can be bought through participant banks and insurance companies. You can buy it directly from your Aadhaar-linked netbanking account. The premium will be auto-debited from the linked account and terminate when you reach the age of 70 or fail to pay the premium. The cover provides a sum assured against death, or partial/total disability due to accident. The nominee receives Rs 2 lakh after the insured death. In total disability (which is described as “total and irrecoverable loss of both eyes or loss of use of both feet or hands or loss of sight of one eye and loss of use of foot or hand”), the insured gets Rs 2 lakh. In partial disability (described as “total and irrecoverable loss of sight of one eye or use of one foot or hand”), the insured is paid Rs 1 lakh.
PAY Rs 100, ENROL FOR PPF
PPF remains one of the best risk-free small savings schemes for the common man. Though the returns fell to an unappetizing 7.6 per cent recently, for an investor looking for a safe investment, this is still the go-to option. The returns are higher than those offered by fixed deposits and are also completely tax-exempt. You can open an account through your netbanking account and by submitting the requisite documents along with Rs 100. Further contributions starting from a minimum of Rs 500 can be made from your bank account, and partial withdrawals can be made from the sixth year.
PAY Rs 210, GET PENSION OF Rs 5,000
If you are an early starter in life already thinking of retirement, why not give the Atal Pension Yojna a shot? Investors between ages 18 and 40 can register for this scheme via their netbanking accounts. The minimum tenure for this scheme is 20 years, and it will start paying out when you are 60. You can assure yourself a life-long guaranteed pension in multiples of Rs 1000, up to a maximum of Rs 5000. The premium increases with age and pension expectation. For example, if you are investing for a pension of Rs 5,000 when you are 18, your monthly premium will be Rs 210; at 40, your monthly premium would be Rs 1,454. Additionally, the scheme also pays out a corpus to your nominee upon your death, up to a maximum of Rs 8,50,000.
PAY Rs 330, GET TERM INSURANCE WORTH Rs 2 LAKH
The Pradhan Mantri Jeevan Jyoti Bima Yojana offers term insurance to the common man at very low costs. A term insurance policy is a pure life cover with no investment benefit. Individuals between ages 18 and 50 are eligible. The cover ceases once you reach 55. You can buy this policy directly from your participant bank’s portal, and ensure you have sufficient account balance while enabling the auto-debit mandate for automatic renewal payments every year.
CREATE WEALTH WITH EQUITY SIPS, FROM Rs 500
One of the best money decisions you can take is to start an equity mutual fund SIP. The minimum contribution you need to make is Rs 500 a month. Systematically investing in equity over the long term will help you create wealth. A small sum of Rs 500 a month invested in a fund providing average annual returns of 12 per cent can give you a corpus of Rs 5 lakh in 20 years. If you annually step up the investment — basically, increase your monthly contribution after every year — by 20 per cent, you will have a corpus of Rs 10.85 lakh in 20 years, or Rs 42.45 lakh in 30 years.
The writer is CEO, BankBazaar.com.
