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    Here are top 6 investment plans for millennials

    Here are top 6 investment plans for millennials

    Here are top 6 investment plans for millennials
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    By Anshul   IST (Published)

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    Millennials are no longer reckless in their spending habits and the recent trend is that they have become smart with their investment and financial decisions, seeking greater value for money.

    Millennials are no longer reckless in their spending habits and the recent trend is that they have become smart with their investment and financial decisions, seeking greater value for money. Given most of them are at the start of the career, they have an additional advantage when it comes to investing with largely no major financial obligations and comparatively higher investing tenures.
    According to Aamar Deo Singh, Head Advisory, Angel Broking Ltd, there are various avenues of investments for them, based on their investment corpus, risk appetite and holding period.
    Here are top 6 investment schemes millennials can choose from, according to experts:
    Tax saving fixed deposits
    The traditional tax saving instruments like the fixed deposit is losing sheen, though, from a safety point of view, fixed deposits or post office saving schemes are the best option even for millennials, according to Abhinav Angirish- Founder, Investonline.in.
    Tax saving FD is a special category of fixed deposit that allows investors to claim deductions under Section 80C of the Income Tax Act. Any investor can claim a deduction of a maximum of Rs 1.5 lakh by investing in tax saving FDs.
    They have a minimum lock-in period of five years.
    Mutual funds
    Millennials can also opt for a mutual fund Systematic Investment Plan (SIP). Under SIP, a fixed amount is deducted from a specified savings account every month towards a mutual fund chosen by the investors, thus creating a financial discipline. These funds offer opportunities in equity and debt segment and cater to diverse investors having different risk appetite.
    According to Pranjal Kamra, CEO, Finology, even the smallest monthly investments in SIP can create an exponential corpus for millennials due to the effect of compounding.
    “They should start SIP investments as early as possible and invest for a longer horizon,” he explains.
    Those looking for tax saving instruments, meanwhile, can opt for Equity Linked Savings Scheme (ELSS) – a type of mutual fund that offers tax benefits. ELSS comes with a statutory lock-in of three years and offers capital appreciation which helps to generate optimal returns.
    Public Provident Fund (PPF)
    For millennials, PPF can be considered as one of the best investment plans in the long run by serving the dual purpose of steady interest income and tax-saving benefits. PPF has a lock-in period of 15 years and compounding, in this case, can reap huge benefits.
    PPF offers an EEE (Exempt-Exempt-Exempt) tax status. The maturity amount and the overall interest earned during the period of investment are tax-free.
    National Pension System (NPS)
    NPS, a government-run investment scheme, gives the subscriber the option to set the preferred allocation to different asset classes. Being a mix of FDs, bonds and equity, it can also be considered as one the best investment plans for millennials, suggest experts.
    NPS offers two kinds of accounts — Tier 1 and Tier 2. While the Tier 1 NPS account is strictly a pension account, the Tier 2 account — known as investment account — is a voluntary savings account associated with the PRAN. Investment in a Tier 1 account offers income tax benefits.
    Unit linked insurance plan (ULIP)
    ULIP is a life insurance product, which offers risk cover for the insured together with investment options. In this, a part of the money is invested in stocks, bonds and similar assets, while the remaining part provides the insured with a life cover. At maturity, ULIP policyholders get back the investment portion of the policy.
    As millennials have ample time, they should definitely invest in ULIPs, say experts. Owing to the higher premiums, it is also easier to exhaust the deduction limit of Rs 1.5 lakh under Section 80C with ULIPs.
    Health insurance
    Millennials should also invest in health insurance policies and avail income tax exemption under Section 80D, based on the premiums paid on these policies. These policies provide security during medical emergencies by covering the cost of the treatment.
    Disclaimer: CNBCTV18.com advises users to check with certified experts before taking any investment decisions.
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