Home Featured Savings or Investing- What Is Best To Do In 2021?

Savings or Investing- What Is Best To Do In 2021?

by Meghashree Das
Published: Last Updated on

Depending purely on individual choices the answer to saving vs investing can be provided. To reach financial goals, both paths lead to wealth-ends. However, it is necessary that one keeps in mind all the aspects of both saving vs investing before making a deliberate choice.

Both saving and investing have their benefits. For a long-term goal, saving in 2021 is considered to be the most simple, non-risky option. However, for people who want to experience financial growth investing is the right place. In this article, we shall reveal facts about the crossroads of saving vs investing and which road should you take in 2021.

Saving vs investing:

Both saving and investing are good finance management options when it comes to managing money. However, saving is a safer option and investing involves risk. Speaking in terms of tax returns, a part of capital gains from equity share investments go to the government as tax.

When it comes to savings, there is no such tax applicable, other than income tax as per financial year. Savings are made purely with what is with the owner after bearing tax. The myth to saving is that money left after expenditure is saving. However, in reality, saving is a monetary sum separated before making any expenditures.

As a fact, investing is more tempting in expectations of higher returns. However, there is always a lot of risks involved in investments, as they won’t always go up. Yet, keeping aside the setbacks, putting your money to work can bear long term fruits in terms of finances.

Advantages of saving:

Saving in 2021 has a lot of advantages, which does not just mean saving from the earned income. The best savings tip here is to claim tax returns and know how deduction points works. In the FY 2020-21 while everyone is busy filing their income tax, knowing the return prospects are also necessary.

Savings can also be attained by depositing money in a savings bank account. Many savings bank accounts offer attractive interest rates, which gives money opportunities to grow.  It is as low as 0.5% in standard chartered bank and as high as 7.50% in Jana small finance bank. In the perspective of tax saving, interest up to 10,000 is exempt under section 80TTA.

Advantages of investing:

Investing in the correct scheme has a lot of potentials. Additionally, it allows the money to grow faster than a savings account. Investments have higher rate return and overtime the money grows profitably.

People can invest in equity shares and have long-term and short-term capital gains. Taxation on the capital returns is also limited to about 15% above 1Lakh capital gain. One needs to tally the correct schemes to invest in and take calculated risks. People can invest in both private company shares and government schemes.

All in all, there are many options to look out for when it comes to making a smart investment. Both saving and investing has its own advantages and disadvantages. Look for what suits you the most, and manage your finances like a pro.

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