PROPGUIDE − A Complete Property Guide
#happyhome

4 Ways To Save Money For Down Payment

4 Ways To Save Money For Down Payment

Down payment is one single component of property buying cost which causes prospective home buyers to take a step back from making a purchase. Down payment is the initial outright amount that a buyer has to give to the developer during the onset of the purchase of a home. This is usually 20-25 per cent of the total cost of buying and is non-loanable i.e. banks do not offer loan on this part of the payment. Thus, the buyer has to arrange for this sum of money.

Since this is a big amount that a buyer has to pay to the seller, it becomes difficult to stay disciplined and save. So, if you are planning to buy a home but unable to save enough, Propguide lists few alternative investment channels, where you can invest cash and liquidate it whenever you are ready to buy:

Recurring Deposit

Recurring Deposit (RD) is a term deposit offered by banks for a customised period of time. One can save a fixed amount every month for a desired period of time and can earn interest. These are ideal for those with fixed monthly income. The interest payable is comparable to fixed deposits. However, if the interest earned is more than Rs 10,000, you will be liable to get tax deducted at the source or TDS. Term deposits are more suitable for beginners who want to be disciplined savers.

Systematic Investment Plans or SIPs

Systematic Investment Plans is an investment vehicle to invest in mutual funds. However, the amount invested is in small amounts to be invested periodically. This can be one of the safest ways to save for down payment, earn returns up to 20 per cent, encash market performance and get it liquidated whenever needed. SIPs are more suitable for those working professionals who would like to bet on stocks but want to stay in a risk-free environment. SIPs are useful for medium- to long-term investment purpose as the returns generated will be far more visible and higher than what you will get if you exit the market in two-three years.

High-interest online savings account

An online savings account is a new trend in Indian market where banks offer 'online only' account. These accounts offer higher interest rate than brick-and-mortar alternative. Almost every private bank is coming up with this offering where the user is offered with online infrastructure rather than the physical one. Since there is less operational cost linked with such kind of accounts, the rate of interest is usually the double on a savings account. Alternatively, you can negotiate the deal with the bank.

Public Provident Fund or PPF

Public Provident Fund (PPF) is another investment tool which is risk-free and also, saves tax. If you have a regular monthly income, you can contribute some amount to your PPF account. You can take a loan against this amount for three years at an interest rate comparable to those offered by banks.  However, there are few regulations and limitations associated with these kinds of accounts like loan amount cannot exceed 25 per cent of the deposited money, the maximum loan tenure is 36 months etc.


Tags: propguide, Finance, Recurring Deposit, SIPs, Online Savings Account, PPF


#Budget2017: Some Modifications To Tax Slabs, Middle Class Wanted More

In an attempt to bring more money into the hands of prospective buyers, the tax slab in the Union Budget 2017-18 has been revised.

February 01 2017

+ Click Here To Read This Article

Is NCR Losing Out To Mumbai, Bengaluru, Pune?

The National Capital Region, for very long, has been the largest residential real estate market in India. But, is NCR losing out to Mumbai, Bengaluru and Pune?

November 10 2015

+ Click Here To Read This Article

5 Creative Eco Resorts Around The World

If luxury housing are eco-friendly then what else could you want? It's like having your cake and eating it too!

May 04 2015

+ Click Here To Read This Article

10 Skywalks In the World That Allow A Stroll In The Clouds

Some wonders are natural. There are however many wonders that are man-made. The best of them are skywalks that give you thrill of danger without having to face it.

June 09 2015

+ Click Here To Read This Article

Proposed Dwarka-Manesar E-Way To Bring Realty Boom In NCR

In the hope of discovering a new and possibly the last of such realty hubs in the National Capital Region, many expats and other investors have rushed in to put in their money.

June 05 2015

+ Click Here To Read This Article

Why Real Estate Is So Expensive In Mumbai

In India’s most prosperous city, half the population live in slums. In Savills' top 12 most expensive cities in the world, Mumbai was the cheapest city to live in. Yet, why is real estate in Mumbai the most expensive real estate is the world?

May 18 2015

+ Click Here To Read This Article

Earth Matters: Sustainable Living Begins At Home With These Steps

Environmentally conscious people would want to live as comfortably as possible without compromising the ecological balance of the planet. But, how should we strike the right balance?

May 12 2015

+ Click Here To Read This Article

Buying a Home? 5 Things That Make Your New Apartment Livable

Each person might have his or her own definition of what makes a place livable. Here are a few things to find out if all your needs are fulfilled and if the new place is safe.

May 11 2015

+ Click Here To Read This Article

You may have implemented all the “21 ways to battle space crunch in your kitchen” but even then,...

India’s rich are looking for luxury properties like never before and are ready to pay as much as Rs...

While most of us assume that wills are created only by those who are rolling in money, this...

Here are today’s top news stories from the real estate sector.

The Goods And Services Taxes has clearned a proposal to charge a cess of 15 per cent on luxury cars...

The Centre recently gave its go-ahead to the construction of the national capital region’s second...

PropGuide tells you how a better metro connectivity will raise real estate prices in Noida.

The first phase of a Metro network is already changing the way people commute in Bengaluru. Upon...

A building code is a set of norms that govern construction of buildings by stipulating minimum...

PropGuide simplifies complex real estate jargons for you.

Proptiger has released it's quarterly review report on India's real estate sector. Ankur Dhawan,...

Sunil Mishra, Chief Business Officer, PropTiger, talks on new online realty platforms for NRIs.

Subscribe Now

To stay tuned with real estate updates

Pick:

x +

Drop Your Query here


Top