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How Do One-Time Investment Plans Work?

One-Time Investment Plan refers to the investment plan in which the lump sum amount is invested for a specified time in just one go. Click to know

  • Jun 08, 2023
  • 2,598 Views
Amit Raje
Written By :
Amit Raje

Amit Raje is an experienced marketer who has worked in various Fintechs and leading Financial companies in India. With focused experience in Digital, Amit has pioneered multiple digital commerce in India. Now, close to two decades later, he is the vice president and head of the D2C business department. He masters the skill of strategic management, also being certified in it from IIMA. He has challenged his challenges and contributed his efforts in this journey of digital transformation.

Amit Raje
Reviewed By :
Prasad Pimple

Prasad Pimple has a decade-long experience in the Life insurance sector and as EVP, Kotak Life heads Digital Business. He is responsible for developing user friendly product journeys, creating consumer awareness and helping consumers in identifying need for life insurance solutions. He has 20+ years of experience in creating and building business verticals across Insurance, Telecom and Banking sectors

Investing your hard-earned money is the only way to grow wealthy over the years. However, you cannot earn and let the money stay in your savings account since it hardly makes anything. Plus, with the rate at which the investment is rising, it is paramount that you start investing in plans that help you prepare for your family’s financial security.

There are various ways in which you can invest money in multiple instruments. One-time investment plans can be handy for most people as they offer long-term benefits.

In this article, we will explain to you how one-time investment plans work .

What is a One-Time Investment Plan?

One-Time Investment Plan refers to the investment plan in which the lump sum amount is invested for a specified time in just one go. This investment plan is apt for those with a large sum of money and a high-risk tolerance. With a one-time investment plan, you will not have to worry about future uncertainties. Making the best and most profitable decision takes lots of effort and time. In a one-time investment plan, the policyholder invests the lump sum amount in one go for a specific period. The return is accumulated on the invested amount. Keeping the amount financed in your bank accounts for a longer duration is profitable for the best results.

Types of One-Time Investment Plan

Below mentioned are some of the one-time investment plans:

Unit-Linked Insurance Plan (ULIP)

It is a type of one-time insurance plan that provides the policyholders dual benefits of investment and insurance. As a result, you can get a life insurance policy and invest the remaining portion of your premium. The fund allocation is flexible and based on your risk appetite and choice of funds, such as equity, funds, or a hybrid scheme. You can switch your funds and modify the portfolio to yield maximum returns. Also, the amount contributed to ULIPs can be claimed as tax-deductible under Section 80C.

Public Provident Fund (PPF)

It is a government-run investment scheme with a lock-in term of 15 years and can be extended upto five years. Under PPF, the income generated on policyholders’ investment is compounded annually, thus resulting in lucrative returns at maturity. One can deposit a minimum of ₹500 and a maximum of ₹1.5 lakhs per year. Additionally, you can use your PPF balance as security when applying for a loan.

Gold ETFs (Exchange-Traded Funds)

Gold ETF is an excellent investment choice as the prices of gold are comparatively less volatile. It is a form of passive investment which can also be used to diversify your portfolio. A minimum of one unit of gold (one gram of gold) is required to begin investing in gold ETFs. It is a secure investment due to the inflation-beating returns and tax benefits. You can start to invest by opening a Demat account and a trading account. The transactions can be done in cash instead of gold.

Fixed Deposits (FD)

Fixed deposits are the most popular low-risk one-time investment plan and offer high returns. The returns on this investment plan are guaranteed. Even though the interest rates on FDs are lower, many people prefer them because of the safe returns. The tenure of this policy usually varies from seven days to a year.

Post Office Fixed Deposits

Post Office FD is another form of Fixed Deposit where the interest rates are determined by the Indian Government every quarter. The returns are guaranteed with a considerable interest rate. It is a secure investment as no volatility is involved. Moreover, POFD also provides the benefits of tax exemption and premature withdrawal.

National Savings Certificate (NSC)

The government-backed post office scheme, NSC, is one of the safest investment options available in the market. NSC provides guaranteed returns and attractive interest rates on your secured amount. The tenure of this policy varies from five to ten years. You can begin to invest with a minimum of ₹100. However, there is no upper limit to investing in NSC. The certificate can also be transferred from one person to another.

National Pension Scheme

Being a government-backed investment scheme, NPS is considered one of the best schemes for senior citizens. Therefore, it is an excellent pick for a one-time investment, especially for those looking to secure their financial stability post-retirement. Earlier, the scheme was available only for public sector employees. However, the central government now allows everyone from the public, private, and unorganized sectors to invest in the NPS.

An Indian national can opt for NPS as a one-time investment during their work years. The best part is when you invest in NPS; you are allowed to collect a portion of your maturity amount. The rest is invested towards annuity, the pension fund for regular payment at intervals. Additionally, you can also save on taxes while investing in NPS.

Numerous one-time investment plans offer high returns benefits to the policyholder, each tailored to a specific goal and risk profile. Every investor is different, and the ideal investment is determined based on time horizon, the amount of capital they are ready to invest, risk tolerance, and willingness to diversify their portfolio.

In this policy, the investment risk in the investment portfolio is borne by the policyholder.

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- A Consumer Education Initiative series by Kotak Life