Smart Ways To Use ?5000

As some of you may be aware, we at BankBazaar.com are running the #FinanceMegaMela from February 1 to 28. We have some of the best deals and offers from the largest ecosystem of partners. The offers and deals are on credit cards, personal loans, home loans and car loans. 

The highlight of the #FinanceMegaMela are the Amazon gift vouchers on every successful disbursement of credit card and loan products applied for through the marketplace. Credit cards are eligible for Amazon Gift Card worth Rs.750. Personal loans come with Amazon Gift Card worth Rs.1000; car loans with Amazon Gift Card Rs.2500; and home loans with Amazon Gift Card worth Rs.5000.

If you apply for a home loan and are wondering what to do with this windfall of Rs. 5000, here are some smart options for you.

Buy A Term Plan Of Rs. 50 Lakh

Assuming you’re a 30-year-old salaried male earning Rs. 500,000 a year, you can get a basic term insurance plan for Rs. 50 lakh rupees for premiums starting from Rs. 4000. Your nominee will get the lump sum in case of your death. If you have dependents, and if you haven’t purchased a term cover yet, this is a must-buy for you to secure the long-term financial interests of your loved ones.

Buy Mutual Funds

If you’re a beginner with mutual fund investments, Rs. 5000 is a good amount to start off with. This is a decent sum for a lump sum investment. But if you’re feeling cautious, you can also go for an SIP with funds that can allow monthly investments for sums as small as Rs. 500. Remember to remain invested for long-term, compounded gains. Rs. 5000 invested in a fund growing 12% annually becomes Rs. 15,500 in 10 years. The same amount locked in a fixed deposit and assuming 30% taxation on interest earnings becomes Rs. 8300 in the same period.

Buy Health Insurance Of Rs. 200,000

Hospitalisation is expensive and will continue to get expensive. If you have taken a health insurance policy, you can get cashless treatment at hospitals that have networked with your insurer. Even with a small budget of Rs. 5000, you can still avail a family floater for yourself and your spouse. Assuming you’re a married 30-year-old, you can get a cover of Rs. 200,000 for annual premiums starting from Rs. 2900.

Reduce Your Debt

Use this little windfall to clear debts. You may have a balance on your credit card, or you may be repaying a loan of some kind. Any payments you make towards your outstanding loan balances will take you closer to getting out of debt. This would also boost your credit score, making it easy for you to take another loan in the future.

Buy Gold

Rs. 5000 is a good amount to buy a small quantity of precious metals such as gold. You can buy them not just in physical form, but also through gold mutual funds or gold ETFs which allow you to own gold in a demeterialised form. 

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