We give you 5 strong reasons why you should plan and make investments sooner rather than later.
Saving early helps channelize money
When you receive a hike in your salary after March appraisals, it is also the right time to channel these extra amounts towards your savings plans, SIPs, home loan instalments to take additional deduction etc. You can also invest it in PPF, New Pension scheme, Sukanya Samriddhi, Insurance or tax-saving mutual funds are other options to divert the additional income for the New Year.
Making the most of fluctuating market conditions
If you prefer market linked investments then making investments made at regular intervals in ULIPS and insurance plans would help you average the cost of purchase. So, if you keep investing Rs 5000 each month, then some months you would invest at lower market levels, while others at higher levels. You would be thus protected from investing money all at one go, when the markets may be high, thus reducing the overall benefit.
Money has more time to grow
If you invest early then the power of compounding comes into play here and you earn interest for a longer period of time thus multiplying your money manifold. For instance, under PPF interest is credited on the deposits invested before 5th of each month. Similarly if you invest in earlier months then money multiplies for a longer period.
Opportunity to analyse the investments well
When one is stressed for time, mistakes are bound to happen. When you invest well ahead of time you can spend time analysing the various options as against your needs and then plan accordingly. There is an array of investments that form a part of section 80C investments and you can choose the one that suits your requirements. Investment proofs can also be collated in time.
Avoid the hassle of claiming delayed refunds
Whenever you delay making investments, you also miss out on the opportunity to claim them as tax deductions and reduce your taxes. This results in heavy tax deductions and a lesser take home pay. This also entails claiming refunds later at the time of tax filing.
So make sure you start planning these investments and save huge amount in taxes.