When it comes to choosing a savings plan, there are two main options: an assured savings plan or a money-back policy. Both have their advantages and disadvantages, so it can be difficult to decide which one is right for you. In this blog post, we will compare and contrast these two types of savings plans and help you decide which one is the best fit for your needs.
What is an Assured Savings Plan?
An Assured Savings Plan is a type of savings plan that offers guaranteed returns. With this type of plan, you are guaranteed to earn a fixed rate of interest on your savings, regardless of what happens in the market. This makes it a great option for those who want to earn consistent returns on their savings. However, one downside of an assured savings plan is that you may not be able to access your money as quickly as you would with a money-back policy.
What is a Money-Back Policy?
A money-back policy is another type of savings’ plan that offers flexible withdrawals and higher potential returns. With this type of policy, you have the ability to withdraw your money at any time without penalty. Additionally, if the market performs well, you have the potential to earn higher returns on your savings. However, if the market performs poorly, you could end up losing money.
What are the Key Differences?
- Sum assured savings plan offers death benefits. That is, if you die during the policy term, your loved ones will get the sum assured as a death benefit. On the other hand, with money-back savings plans, there is no death benefit.
- While the money-back policy will reimburse the entire premium that you had contributed to the plan, the bonuses that you might have earned are not returned in case you die.
- In the case of a sum assured savings plan, it covers the risk to your life and provides you with a lump sum at the end of the term.
How to Choose the Right Savings Plan for You
When it comes to choosing a savings plan, there are a few things you should keep in mind. First, consider your financial goals and needs. Do you need access to your money right away, or are you comfortable having it locked away for a set period of time? Are you looking for guaranteed returns or the potential to earn higher returns? Answering these questions will help you narrow down your options and choose the right savings plan for you.
Next, compare different savings plans from different providers. Make sure to compare things like interest rates, fees, and withdrawal options. Once you’ve found a few that meet your needs, read reviews from other customers to get an idea of their experience. Finally, make sure to do your own research to ensure that the provider is reputable and has a good track record.
So, Which Type of Savings Plan is Right for You?
If you are looking for guaranteed returns and don’t mind having your money locked away for a set period of time, an assured savings plan may be a good option for you. On the other hand, if you are looking for more flexible withdrawals and the potential to earn higher returns, a money-back policy may be a better fit. Ultimately, the decision comes down to your personal financial goals and needs.