You can achieve your financial goals with great returns and fewer risks. To do this, you need to make sound investments. Investing is a good way of multiplying funds, but remember, it is essential for you to create an investment portfolio when you plan to make investments. It should comprise your net income, total expenses, financial objectives, and money you can invest.
Before choosing a one-time investment plan, you should evaluate various options, their pros and cons, risks involved, interest rate, and duration to choose the best option. So, let us first understand the exact meaning of a one-time investment plan before moving further.
Also Read: What is Investment?
What Is a One-Time Investment Plan?
In a one-time investment plan, you will be required to invest a lump sum amount in one go, in a certain scheme, for a specific duration. If you wish to invest and have a capacity for high-risk tolerance, it is perfect for you to opt for this form of investment.
You can use the one-time investment calculator to estimate the return on investment. All you need to input is the money invested, interest expected, and tenure. The amount you will be earning annually or by the end of the term will be calculated.
A significant benefit of investing in a one-time investment plan for a newborn baby is that it has low charges. You need to pay the fee only once. Another benefit is that you need not keep track of payment dates and be worried about missing them. You pay once when the policy starts.
One-Time Investment Plan Options
Different companies offer different plans, such as one-time investment plans for newborn babies, kids, and adults.
The other options are:
- Equity Funds: Equity funds are less risky than other one-time investment plans, as they offer a high return. Another benefit of equity is getting a tax rebate under section 80C by investing in Equity-Linked Savings Schemes (ELSS). The perfect lock-in period recommended is three years. Invest if you are sure you can keep the funds for a longer time.
- Debt Funds: If you are looking for the best one-time investment plan for a child, you can also invest in AAA or AA rated corporate bonds or government securities. They have less risk than equities and steadier returns, but you do not get a tax rebate in debt funds. You can invest in them for three years, as you get indexation benefits after that period.
- Unit Linked Insurance Plans (ULIP): ULIPs are the best one-time investment plan for a child, as they provide both life insurance and a good return on investment. Another good part about investing in ULIPs is that you can move your money between low, medium, and high risk as per your choice.
It majorly offers life insurance plans, but they also have an added feature of investing money in various money-market linked assets as per your financial goals. Many people prefer ULIP because it also offers tax benefits under section 80C and tax-free maturity value.
How Important is a One-time Investment Plan?
The reason why millions of people choose to invest is that monthly income isn’t enough to suffice their long-term plans, and it is always convenient to have a safety net. For that, investments are essential.
Most people go for a one-time investment when they have a large corpus to invest, the reason it is important to invest is that through investing the amount, the sum will keep increasing over time. It is the investor’s choice to keep the money or invest it, but investing smarty comes with many benefits including- low risk, heavy returns, and a safety net.
Factors to Keep In Mind While Selecting a One-Time Investment Plan
- Information on market valuations: The first thing to keep in mind while choosing the best one-time investment plan for a child or adult is that you should have complete knowledge of the market. In case of any doubts, you should consult an expert. Furthermore, it is essential to calculate the risk involved and return on investment before you choose any plan, and for doing that, you can use a one-time investment plan calculator.
- Liquidity: First, you should note down your expenses and income. Then, calculate the amount available for investing, apart from savings, as it involves high risk. Once you know the amount, select the best one-time investment plan.
- Keep calm: The market can be volatile and be down or slow. It would help if you remained patient and did not panic. Choose the best one-time investment plan, and you will reap the benefits in time. One-time investment plans offer high returns, but this market is not for you immediately if you want the returns.
Pros of One-Time Investment Plan
- No need to remember the payment dates as you need to make the payment once
- Higher return
- Low transaction charges
- Better capital growth
Cons of One-Time Investment Plan
- Higher risk
- It is not a great option if you might need funds shortly
- Less investment discipline
- Check its market value while opting for a one-time investment plan for your child or yourself.
- If you are a beginner investor, consult an expert to clear any doubts to properly understand the plan.
- Analyze every component of the one-time investment plan and calculate the risks before investing.
- Always check a company’s record before investing in any one-time investment plan for a child. This will help you compare and understand if the estimated returns match your expectations.
Choose the best one-time investment plan, but you need to keep in mind that you should invest your spare money. Do not invest all your savings in a plan as, along with high return, they are also subject to high risk.
You can use a one-time investment calculator to analyze the profit and risk per the amount invested.
The documents required for applying for one-time investment plans are-
· Address proof- Passport, Aadhaar card, voter ID, etc.
· Income proof- Bank statement, last three months’ salary slip, etc.
· Age proof- Driving license, Aadhaar card, passport, etc.
· ID proof- Voter ID, Aadhaar, PAN, etc.
Both plans are equally good. The one-time investment plan offers high returns, but it will also depend on your prerequisites and financial goals. If you like to invest a small amount, you can opt for SIP.
If you choose the one-time investment plan in a mutual fund, you cannot invest multiple times. You will have to invest all the money at once.
Many people invest in a one-time investment plan for a newborn baby for certain major goals like education, marriage, and providing a better lifestyle.
You need to input the total investment amount, invested return, and period for which you want to invest in the one-time investment calculator. It will calculate the estimated return on your investments.