The initial step to accumulating a travel kitty could be to ascertain the total expenses. The costs could differ depending on the location, the trip duration, and the value of the Indian Rupee against that country’s local currency.
After finalising the destination, you could start looking at investments to meet the travel costs. For trips to American and European locations, it would be beneficial to begin investing at least three years in advance. This will help you save adequate funds for the trip.
A mix of insurance and mutual funds could enable systematic savings over a given period. On the Standard Chartered SC Invest platform, you could choose from pre-generated SIP packs.
Investments that offer consistent returns over a fixed period could be chosen. This will ensure that you are well prepared for any adjacent financial emergencies during the trip. Let us look at the key investments needed before you take that international vacation:
- Mutual funds: Through systematic investment plans, you will be able to invest a fixed amount of money every month for your travel goal. For instance, if you invest Rs 20,000 every month for three years, you will accumulate a wealth of Rs 8.42 lakh at an expected 10% rate of return per annum. Mutual fund schemes, under the equity-linked savings scheme category, also offer tax exemptions of up to Rs 1.5 lakh. More insights on mutual fund schemes are available on the Standard Chartered SIP platform.
- Life insurance: Unit-linked insurance plans offer the dual benefit of insurance and investment. So if you are planning to undertake a world tour, Ulips are an option to consider. However, do remember that these products have a lock-in period of five years before which the investments cannot be withdrawn. You can browse for relevant wealth creation plans on the Standard Chartered website.
- Health insurance: Some travel visas, such as Schengen, require mandatory health insurance coverage. Your existing health insurance may not cover medical emergencies abroad. Hence, purchasing an international health cover could be essential before you undertake the trip. It would be beneficial for those in their 50s to have medical insurance because treatment costs internationally are significantly higher. For more information on health insurance plans, you can visit the Standard Chartered portal.
One factor to remember is that international currencies are volatile. So if you had finalised a budget for your travel a year or two ago, the exchange rates could have changed. Hence, it could be useful to keep track of the rupee’s rise and fall against global currencies such as the Singaporean dollar, US dollar, Euro, and UK pound.
Each investment is meant to serve a particular life goal. If your goal is world travel, it will be favourable to review your investments and their returns on a yearly basis. Depending on how the debt and equity markets have performed, the existing investments can be reviewed and tweaked.
For instance, Ulip plans offer a fund-switch facility where you can shift your money from one fund to another within the same policy. This is intended to maximise returns during periods of a market downturn. A similar option is also available in the case of mutual funds, where you could switch between funds within a mutual fund company by filling up a switch form.
Market conditions can vary on a daily basis. Standard Chartered’s market insights could help you stay informed about the latest financial developments.
Using a series of investment tools, you could fulfil your travel dreams even in your 50s. Even if you have set expenses for the trip, setting aside funds for trip delays, extensions, and unplanned health costs could help overcome any financial crunch during your overseas vacation.
This article is for information and educational purposes only. It is meant only for use as a reference tool. It has not been prepared for any particular person or class of persons. The products and services mentioned here may not be suitable for everyone and should not be used as a basis for making investment decisions. This article does not constitute investment advice nor is it an offer, solicitation or invitation to transact in any investment or insurance product. The value of investments and the income from them can go down as well as up, and you may not recover the amount of your original investment. Prior to transacting, you should obtain independent financial advice. In the event that you choose not to seek independent professional advice, you should consider whether the product is suitable for you. You should refer to the relevant offering documents for detailed information.
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Standard Chartered Bank, India having its principal place of business at Crescenzo Building C-38/C-39 G Block, Bandra Kurla Complex, Bandra (East), Mumbai – 400051 is a licensed Corporate Agent of ICICI Prudential Life Insurance Company Limited (IRDAI Reg No. 105) for life insurance products; Royal Sundaram General Insurance Co. Limited (IRDAI Reg No. 102) and ICICI Lombard General Insurance Company (IRDAI Reg No. 115) for general insurance products and Niva Bupa Health Insurance Company Limited (IRDAI Registration no. 145) for standalone health insurance products vide corporate agent number CA0028. All insurance products are underwritten by the respective insurance companies. Participation of Standard Chartered Bank clients in any insurance scheme is purely voluntary, and is not linked to the availment of any other banking products or services from the Bank. The benefits/ features of the products are indicative only. For more details on risk factors and terms and conditions, please read sales brochure carefully before concluding sale. Insurance is the subject matter of solicitation.
