Saving Options for Your Hard-Earned Money

Your money must be saved at every opportunity. We present a few simple ways to save more.

As a working professional, your monthly income goes a long way in protecting your future – but only if you have enough of it saved. Consider the following saving options for your money:

* Open a savings account. The number one savings tip for working professionals is to open a good savings account. Make sure that the bank pays at least 4% quarterly interest on the savings deposits, so that the more money you save, the more the deposit earns. Over time, your savings fund can grow into a large sum of money that you can use for an important goal.

* Create a tax saving fixed deposit. This is a savings tip that will augment the size of your fund: open a fixed deposit account. The fixed deposit is opened with a lump sum amount of money, for a certain tenure and at a certain rate of interest. The rate of interest remains constant throughout the deposit tenure, so you can calculate the maturity amount even before you open the fixed deposit account. You can boost the appreciation potential of the FD by opting for a tax saver deposit with a lock-in period of 5 years.

* Invest in mutual funds. A good investment tip for working professionals is to make your income work for you, instead of you working for an income all your life. Setting money aside in savings is all very well, but if you want higher and more structured growth, then you must consider investing in mutual funds. Look up your bank’s suite of products for the kinds of mutual funds they trade in. Depending on your risk profile and goals, you can choose between equity and debt mutual funds, and narrow it down to large cap, mid cap and small cap funds, for example.

* Invest in life and health insurance. Though it might not seem like an investmenttip at first, insurance is a must-buy for every working professional. Itprovides a large sum of money in case your income stops due to an accident,disability, ill health or even premature death. Instead of dipping into thesavings fund at that time, the insurance money can come to the rescue. You alsoget tax benefits for investing in life and health insurance in India.

*Take stock of your expenses. Thisis an important exercise: take a look at your account statement to know theareas of unnecessary expense. Shopping every week? Check. Paying bills bycheque instead of getting cashback online? Check. That unused gym membershipthat you have not yet got a refund for? Check. Soon you can identify areas offrequent expense that you can cut out entirely, and save a lot of money everymonth.

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