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Investments are monetary plans which provide a high return on the invested money after a duration. But what if there were ways to increase the returns of these already profitable investment plans. Well, that is possible through effective investment planning. Given below are some of the methods of investment planning that will help you maximize the returns from your investment plans.
Top 6 Methods to Increase Your Returns from Investment Plans
People often choose investments based on their financial capacity. So, choosing high returns funds that are capable of providing high returns is not possible for everyone due to monetary restraints. But an investor can always increase the returns if they take a few precautions in their future endeavours or make a few corrections in their existing investment plan. By doing so, they can increase the benefits of a plan even with the restrictions of available money. Given below are six of the best methods to enhance investment plans to receive a higher return.
Investment Schemes from The Government
One of the most preferable methods to obtain high profits with a trustworthy scheme is to invest in schemes from the government. Such schemes have a high return ratio as they are from the government and for the benefit of the citizens. By investing in such investment plans, the chances of loss due to the provider’s defaulting are very low. And even if such a scenario occurs, there are relaxation and compensations from the government’s side to make sure the plan doesn’t suffer.
Some common government schemes that people benefit from are Provident Funds, Pension Schemes, Savings Plan Schemes, Cash Certificates, Sovereign Gold Bonds, and Schemes from Nationalized Banks.
Maximize Investment Amount
It is often observed that the returns also increase with the increase in the investment amount. This happens because almost all investment schemes fix an interest rate on the investment and return it at the end of the term. So, the higher the investment amount, the higher will be the interest amount.
Increase Investment Duration for Better Interest Rates
There is also an increase in interest rates with an increase in the investment duration. This is evident in banking schemes where the interest rate of fixed deposits increases according to the duration of the deposit. This is why several people encourage investing in investment plans as early as possible.
Another benefit of longer durations is that the payments also become low. An example is life insurance, where the premium amount becomes lower when the age of the life insured is lower. One more benefit of long-term investment is the provider gives several discounts and offers for extended collaboration. This is also seen mostly in insurance schemes where there are existing customer discounts and no-claim bonuses.
Prefer Banking Schemes with Compound Interest
Another method of investment planning allowing increased returns is opting for compound interest whenever a choice is available, especially in banking schemes. With compound interest, the final maturity amount of the investment plans increases much more than that of simple interest.
Avoid Risky Investments
Avoiding risks is also an integral part of investment planning that helps indirectly increase returns from investment plans. All investments have their own risks associated with them. So, understanding these risks of a particular plan can help stay away from those mistakes. All common risks that people often bear are avoidable if they choose to read the plan terms and conditions.
Indirect Returns Enhancement Through Tax-Savings
Another method of indirectly increasing returns is to look for tax-saving plans. Several long-term investment plans have government-approved tax deductions, which are claimable at the time of filing ITR. Letting go of these tax savings will be unwise as this money spent towards income tax could be useful for other personal and family needs.
By using all these methods in any of your investment plans, you can maximize your returns. Through proper investment planning, no means of savings will go unnoticed, and you can get the most out of an investment plan. Another sure shot method to increase the returns is to invest in safe and reliable plans like life insurance.