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Wealth Management

Profitable Single Pay Investment Options in India

By Jayprakash Shetty

January 3, 2022
Single Pay Investment Options - by Jayprakash Shetty

What are single pay investment products?

A one-time investment plan is a sort of investment in which a lump sum amount is invested in a certain scheme in one go for a specific period of time. If you have a large sum of money and a high-risk tolerance, you can invest in a single pay investment plan. 

Benefits of single pay investment products

Single premium investments are best for people who do not have a stable source of income. Some other advantages of single pay investment products are as follows:
  • You may save yourself the trouble of remembering the premium payment deadline every year.
  • You are not required to bear the risk of a policy lapse or cancellation or termination.
  • Single premium insurance plans may also have built-in features that increase policy coverage.
  • Single-pay investments have decent tax advantages.

6 best single pay investment products available in India 

  1. Equity funds 
Because of the diversification and expert management involved, equity funds are less risky than other direct options. If you wish to avoid tax under Section 80C for the fiscal year and want to invest in equities funds, consider Equity-Linked Savings Schemes (ELSS).  Equities-linked savings programmes are pure equity funds that provide a tax deduction of up to Rs 1.5 lakhs under section 80C.
  1. ULIPs
ULIPs are extremely tax-effective investments. That is, they provide you with an 80C deduction, a tax-free maturity value, and a variety of equity and debt fund alternatives. ULIPs may be the only investment vehicle that allows you to invest in both debt and liquid funds while still reaping the same tax benefits. However, tax advantages are only available if your yearly premium is less than 10% of the total guaranteed amount in your policy.
  1. Debt funds 
There are many different forms of debt funds, but this option accounts only for those who invest in AAA and AA-rated corporate bonds or government securities for your consideration. These funds are much less risky than equity funds because of their securities composition. In addition, you will profit from the fund’s diversification of holdings.
  1. Mutual funds 
One of the most common ways of investing a lump sum one-time amount is a mutual fund plan. Mutual funds package is a beneficial investment choice for experienced investors who are well-versed with the ever-fluctuating market circumstances. Before investing in lump sum mutual funds, it is important to talk to an experienced asset manager. 
  1. RBI taxable bonds
The government of India had made an announcement to issue 8% Savings (Taxable) Bonds, beginning from April 21, 2003, to allow resident citizens/charitable institutions/universities to invest in a taxable bond with zero monetary limitations. The Bonds’ key characteristics are that they are available for investment by individuals (including Joint Holdings) and Hindu Undivided Families/charitable institutions/universities. The Bonds are bound to mature in 6 years and pay an annual interest rate of 8%, payable semi-annually.
  1. Single pay pension products
If you are seeking the finest Single Premium Pension Plan in India, you may have to sift through a plethora of alternatives available in the market. If you are looking for a plan that will allow you to meet your needs after you have stopped working, you should take professional help from a qualified asset manager.

Factors affecting single pay investments

  • Market conditions: Assessing market conditions might assist you in determining the best timing for a single pay investment. You may do this by looking at the Price to Earnings (P/E) ratio of a broad market index like NIFTY during the last four quarters.
  • Returns: Investigate the historical performance of the funds you intend to invest in, as well as the expected returns. It will guide you in determining whether the anticipated returns are in line with your expectations or not.
  • Liquidity: When making a one-time investment, you should assess your financial situation as well as the potential for quick access to cash. It’s important that you go through the terms and conditions thoroughly especially if you are a new investor. 
  • Patience: Patience pays off in the long run when it comes to investing. If you keep calm and invest, you are more likely to experience better results.
  • Duration: Volatilities in the market level out with time. As a result, a longer investing horizon permits you to invest in shares with better return potential.
To sum it up While there are several single pay insurances or investments available in the market across various product types, you will need to do your homework, evaluate various plans, and choose a policy that offers premium rates and coverage that meet your needs and risk capacity. Are you planning to invest your yearly bonus this year in the hopes of earning a competitive return? It is best to employ a long-term financial goal for yourself and your family. How? I’ve got you covered. Reach out to me for further information. FAQ’s 

SIP or one-time investment, what should I choose?

It depends on multiple factors such as your income, investment capacity, risk capacity, objectives, bandwidth, etc.

Can I invest in multiple single pay insurance or single pay investments as a part of my investment portfolio?

Yes, you totally can. 

Why are one-time insurances or single-pay investments highly recommended?

With these schemes, you only have to pay for the insurance or investment once, and you get to enjoy the benefit for the rest of your life. This is what makes them more appealing to investors.
Tags: Mutual Funds

Jayprakash Shetty

I am a Limra, IRDA, NISM Certified Financial Advisor for Individuals & Organizations carrying an industry experience of 18+ years. I specialize in need-based financial planning & portfolio management for my clients and associates. I like to write about Financial Planning, Investments, Insurance, Retirement & other related topics that affect our lifestyle. Let's connect for a casual chat about Financial Planning & Wealth Management.

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