Indian women today are breaking every barrier, making their names in every field, industry, or sector, and becoming economically independent. They know the importance of investments for financial freedom, to secure their future, and to achieve all desired goals. Hence, there is a need for essential money management through different saving options, and the 20s is the right age to take the risk to secure their 40s.
Many savings options are available in the market, and below, you will find the best ones to suit every woman’s needs.
Savings Options for Women in Their 20s
It is always better to start early and create enough corpus for your future, and therefore, below are some excellent options for every woman in their 20s. You can choose the best savings plan that meets your needs from below.
1. Public Provident Fund
This government-launched investment option is amongst the most reliable for women, regardless of age. With PPF, you can get an interest rate of 7.1% annually, making it an excellent and risk-free option. Besides, PPF also helps with tax savings as the interest, investment, and maturity amounts are all tax-exempt.
2. National Pension Scheme System
The national pension scheme system is an excellent option for women seeking stability or long-term growth. It has two kinds of accounts—Tier I and II—and is a market-linked plan specially created for retirement. You can create a diversified portfolio of government bonds, equity, corporate bonds, liquid funds, or fixed-income plans, making it the best savings plan with constant returns for women.
3. Mahila Samman Savings Certificate
Mahila Samman’s savings certificate (MSSC), introduced in the 2023 budget, is a small savings option by the Department of Economic Affairs and is considered promising. The scheme offers an investment period of two years with an annual interest rate of 7.5% compounded quarterly. Under this scheme, you can also opt for partial withdrawal of up to forty per cent of the eligible balance.
4. Insurance Policy
Insurance policies are not only taken to prevent unforeseen health issues, but also excellent investment and savings options. If you purchase it early, like in your 20s, you can even have low premium amounts as companies consider your health and age before offering the plan. For instance, you can compare different amounts like 50 lakh or a 30 lakh term insurance premium and opt for the one that suits you the best.
Also, term insurance can offer tax savings, and you can claim a premium deduction under Section 80c.
5. Fixed Deposit
Fixed deposits are undoubtedly the most secure investment option for women in their 20s. Different banks and financial institutions provide FDs at varied interest rates. You can search for the one that offers you the best rates to help you meet all your long-term financial goals.
6. Post Office Time Deposit Scheme
The post office time deposit scheme is another plan to consider in the 20s. It offers competitive interest rates and tenure flexibility, perfect for meeting short-term financial goals.
Why is Early Savings Important?
Time is money; if you start saving early, like in your 20s, you can benefit from compounding. Compounding means that the earnings you generate from your investments create more profits. Here is a simple example to make you understand the same:
If you start investing 10,000 in your 20s with a 10% average annual return, your investment amount will be approximately 35 lakh when you reach your 60s. If you start investing the same amount in your 30s, you may end up with approximately 18 lakh only in your 60s. The simple reason is that the extra 10 years you get by investing early will double your final corpus.
Moreover, investing early also helps with:
1. Reduced anxiety and stress:
Since you will be well aware that you will have enough money at retirement, it will reduce financial stress and anxiety.
2. Freedom and flexibility:
Having a financial corpus gives you the flexibility and freedom to retire on your terms and pursue your dreams.
3. Market volatility protection:
When invested early, it gives your investments time to recover from market volatility and downturns.
4. Emergency ready:
These savings support retirement and come in handy in emergencies.
Takeaway
The 20s are the age to take risks and learn the basics of money management by getting financially savvy, avoiding pitfalls like taking debts, and beginning to save. Taking the required steps today will ensure your money is used wisely and you have enough corpus when needed. Therefore, you must choose the best plan that suits your interests and goals.
From PPF to NSC and FDs, many plans exist for women in their 20s to opt for a financially secure future. Also, remember that it is also the time when you are in good health, and hence, you can get lower premiums. For instance, a 30 lakh term insurance premium will be less for you in your 20s than when you reach your 30s. So, make the choice and decision wisely.
