Buying a house is a lifetime investment, possibly the largest investment you will make, especially in India. Are you worried that you will never be able to save enough to buy your own home? It sure is a big step, although totally worth all the sacrifices and savings. Having a home of your own is one of the greatest achievements in an ordinary person’s life. Of course, with banks vying for customers, today you can get some great deals on home loans in India that can ease the process of purchasing a house.
However, you still need to save to make the down payment because home loans in India tend to cover only about 80% of the total cost. Here’s a look at some ways to save money for owning your own house.
The earlier you start investing, the more money you will end up saving. It is recommended to start saving in your 20s itself. This way, you can take advantage of compounding to multiply your savings. The longer the time you have to save, the better will be the impact of compounding. The more you are able to pay on your own, the lesser will be the loan amount, which will make the EMIs much more affordable.
Invest in Public Provident Funds
The Public Provident Fund or PPF is one of the most efficient investment options in India. It comes with various benefits, such as tax benefits under Section 80C of Income Tax Act of 1961, loan and partial withdrawal benefits and lock-in policy tenure of 15 years. Moreover, the interest rate offered is 7.6% per year, much higher than even fixed deposits.
Invest in Gold
You might have heard elders talking about gold being an important asset and investment. It is true, especially given that the value of gold tends to rise over time. You can buy gold in different forms, such as jewellery, bullion, ETFs, etc. However, since the price of gold does fluctuate, financial experts recommend investing on gold very carefully, says an article in The Economic Times.
Invest in FDs
Fixed deposits or FDs is another way to invest for your dream home. With various benefits, such as guaranteed returns, flexibility, easy withdrawals and high rate of returns, it is an ideal option to start your investment with. Since these are not market-linked, they tend to be the safest investment option.
Invest in Mutual Funds
Investing in a mutual fund is great way to ensure that you save money regularly over the long term. You can then use such investments to finance the down payment of your dream house. Depending on which policy you buy, you can easily get returns of 10% to 18%. Mutual funds also come with various other features, such as tax benefits, choice of risks, etc.
Starting to save for your house is the first step to buying one! It is advisable to do thorough research of various investment options and compare benefits of different policies putting in your hard-earned money. If you are still confused, don’t hesitate to get the assistance of an expert, who can help you select a suitable option to invest for your home.