The time for resolutions has arrived. And if your New Year resolution is to save, we know just the right places for your plans. So, don't let agents, banks and companies hound you for your money, sneak a glance at this money saving cheat sheet and we guarantee you a richer bank balance by the end of this year

Systematic Investment Plans
SIP is the moolah buzzword for 2012. It is a convenient investment plan where you can invest the tiniest sum (minimum being R500) every month and gain good returns. It is very similar to a recurring deposit, the only difference being that here the money gets invested in mutual funds. While your investment is open to market risks, the risk is mellow because these funds are invested into different shares. This means that you do not put all your eggs in one basket. While investing in SIPs it is necessary to choose your portfolio carefully. “This is the best option for beginners, in the age group of 23-30 years because they can afford to take risks,” says Bhavin Kapadia, Branch Manager, ICICI Bank Ltd. SIPs give around 35 per cent returns.

Mutual Funds
Mutual funds are akin to fixed deposits. “For those who have a long-term investment plan and who can stomach the volatility, it would be a good point to enter into equity/ equity oriented MFs,” says Suresh Sadagopan, Financial Planner at Ladder7 Financial Advisories. Well, there are risks involved. And so it is necessary that you choose the fund carefully. Choose at least three mutual funds to invest in so that your investment is diversified. Financial consultants say the best bets for 2012 are Franklin India Bluechip, ICICI Prudential and HDFC Top 200. They will give around 20-30 per cent returns, if kept for a considerable period of time. Although, it also depends on the growth of sectors you invest in.

Fixed Deposits
“For those who have a low risk appetite, FDs present a good investment option,” says Suresh Sadgopan. So, if you have a lump sum of money but are averse to taking risks, then opt for this traditional option. Private Banks offer competitive rates on these deposits and if the amount is huge you can enjoy regular pay-outs in form of interest. This serves as a regular source of income. But because these are not equity linked, the returns won’t be at par with Mutual Fund investments. Depending on which bank you invest in, you will get an interest rate ranging from 7 – 9.5 per cent.

Insurance
“We don't suggest insurance for investments, as charges embedded in insurance products are very high,” says Suresh. So, here’s the thumb rule – keep your investment and insurance separate for best returns. As you look at various investment options, do not forget to insure yourself, because a calamity always strikes unannounced. And without a cover, your future plans could go for a toss. Investing in insurance is getting simpler day by day. You can invest through an agent, a bank (bancassurance) or directly through an insurance company. “We normally recommend term insurance for our clients because that is the lowest cost insurance,” Suresh says.

But while looking at this investment options, here’s what you should keep in mind.

According to experts, the policy amount should be at least 12 times your annual income.

The tenure of your policy should be till your retirement age. That means you won't have to pay premiums after the age of 60.

Research carefully before including add-ons in your plan. There are chances you end up paying for facilities you already have.

Tax saving options
Well, you have just started earning and soon it will be your turn to pay the taxes. If you do not want tax amounts to burn a hole in your pocket, invest some money in the tax saving options. But while investing in these options, remember that it is a long term commitment. While Public Provident Fund (PPF) and National Saving Certificates (NSC) are the traditional tax saving schemes, you can also save tax on Mutual Funds and Life Insurance nowadays. 

Investment Sins

• Ignoring portfolio reviews – If you’ve invested in Mutual Funds or SIPs, then you need to keep reviewing your portfolio according to the market. You can either delegate this work to your portfolio manager or do it yourself online
• Considering government bonds as the best – trust us, that’s passé. Government bonds give pretty low returns and they have a lock-in period. So, many investment managers now consider it as a dead investment