There is a general feeling that millennials — or those born between 1981 and 1996 — lack patience and motivation to save for the long term, given their penchant for “living in the present” and a large appetite for risk-taking. However, the novel coronavirus pandemic has upended our lives like never before, and highlighted, more than ever the importance of accumulating money instead of frittering it. Anxious about an uncertain future, financial worries have only increased with sudden expenditures and other hardships making a way into everyone's lives, including millennials. So, here are a few investment options that will help millennials make wise choices and likely ensure a financially stress-free future.
Unit Linked Insurance Plans
ULIPs offer the potential of wealth creation while providing the security of a life cover. A part of your premium goes towards your life cover and the rest is dedicated to a fund, which invests in equity, debt, or a combination of both. The returns on your investments depend on the performance of the fund opted by you. Also, these plans offer tax exemption on maturity amount if the annual premium is below Rs 2.5 lakh.
Public Provident Fund (PPF)
A popular investment scheme because of its multiple investor-friendly features and benefits, it is a long-term investment scheme for those looking for stable returns. Invested funds in the PPF account are not market-linked and they come with a lock-in period of 15 years.
Equity Linked Saving Scheme Mutual Funds
Investing in Equity Linked Saving Scheme mutual funds leads to double benefit of tax deductions and wealth accumulation over time. They have the shortest lock-in period (three years) among all tax-saving investments. They offer tax deductions of up to Rs 1.5 lakh a year under Section 80C.
National Pension Scheme
A social security initiative by the Central government, it is open to employees from the public, private and the unorganised sectors except from the armed forces. Scheme account holders can invest at regular intervals during their employment and after retirement, they can take out a certain percentage of the corpus. They will receive the rest of the money as a monthly pension post retirement.
Buying a life insurance policy is one of the best investment plans for millennials. This instrument provides millennials an opportunity to ensure that their family members don't have to worry if anything fatal were to happen to the insured people. Millennials can also buy term insurance plans to meet their future goals without any financial distress. These plans also offer tax benefits up to Rs 1.5 lakh.