How joint investments with spouse can help you plan your finances better

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Updated: May 8, 2018 11:21:18 AM

Joint investments can be a double-edged sword, but if done with the right intention and planning, can prove to be very fruitful for the couple and their future.

joint investment options with spouse, joint investment in mutual funds, joint investment account with spouse, joint investment in property, mutual funds, home loan, Joint Recurring Deposit, medical insuranceHere’s a look at some popular joint-investment options for couples and how they can benefit from them.

Investments can be taxing when doing it alone, but having a partner who chips in with you every month can ease out your tensions. And who better than your spouse to plan your investment with? Joint investments can be a double-edged sword, but if done with the right intention and planning, can prove to be very fruitful for the couple and their future. Let’s have a look at some popular joint-investment options for couples and how they can benefit from them.

1. Home Loan

This is probably the best investment a couple can do together, not only as it signifies a huge financial step, but also helps both the husband and wife save taxes together. A joint home loan can be taken to fund the purchase of your dream home. In a year, principal payment of Rs 1.5 lakh and interest payment up to Rs 2 lakh can be claimed as deductions from income tax (IT) per individual. This means up to Rs 3 lakh on principal and up to Rs 4 lakh on interest can be claimed.

For repayment, having your spouse over your back is a great option when taking a break or switching jobs as EMIs will still have to be paid regularly.

2. Medical Insurance

Money not withdrawn from investments or savings amounts to protection of the investments made. While medical insurance may not reap any interest benefits monetarily, it will help you from breaking your savings as medicals costs will be covered by the insurer.

Opt for a family floater plan for which both husband and wife can claim exemption up to Rs 25,000 a year in total under Section 80D. To make sure that you pay minimal amount in liquid money for your hospital bills, ensure that you get an insurer who has a wide network of cashless hospitals under its ambit. Further choose a plan that covers critical illness and pre-existing diseases as well, as some medical procedures could run into lakhs of rupees.

3. Mutual Funds

MFs have high growth potential that can beat inflation and fetch tax-efficient returns. You can either invest a lump sum amount or start an SIP for your spouse or work out a plan to invest together. Many brokerages offer joint holding account for mutual funds (MFs). These can be between two individuals or a maximum of three account holders. To invest under joint names, all the investors should be KYC compliant.

If one of the investors is not KYC compliant, then he/she cannot be added as the joint holder. Its operations work like a joint bank account except the fact that only the main account holder will be entitled to the tax benefits from ELSS funds if any in the portfolio.

You can open a mutual fund account online, just as you shop on e-commerce websites. You can visit any online fund aggregator or buy directly from the fund house’s website. Remember to pick a highly rated fund with a track record for excellent performance.

4. Joint Recurring Deposit

Recurring deposits are traditional and offer low to moderate returns, but are a great way to save for a contingency fund. This will not get you any tax benefits like the other investments mentioned above, but will ensure that you have a helping hand when building that emergency corpus. Instead of one person putting a considerable amount into an RD, divide it between the husband and wife in the ratio suited to one’s disposable income and start the RD. Be it a holiday, a family occasion or an emergency, you can prematurely withdraw your savings at any time.

(The writer is CEO at Bankbazaar.com)

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