Joint Investment Options with spouse for a better financial future

Roboadviso Financial Planning,Mutual Funds Posted On, Fri 18th May, 2018 No comments

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Investing in the correct areas can be a rather difficult process when one does it all on their own. However, the presence of a partner who contributes to the savings and investments on a monthly basis can help relieve the worries and tensions. One of the best partners that a person can have with regards to investment planning is your spouse.

Investing jointly with a partner/spouse can have great outcomes or can be fraught with lots of issues. However, when it is carried out with good planning and correct intentions, then it can end up being very beneficial for couples and their financial and personal futures.

Provided below is a discussion at some well-known options of joint investment for couples and how they can make such investments fruitful for themselves.

Home Loan

One of the best investments that a couple can opt for jointly is the home loan. It is not only indicative of a first big financial leap together, but also assists the couple to jointly save on taxes. A husband and wife can take a joint home loan to be able to afford the purchase of a property which can be their dream home. It may be noted that interest payout of up to INR 2 lakhs and principal payout of up to INR 1.5 lakhs can be availed by each individual as IT/income tax deductions. Thus, a couple can claim up to INR 4 lakhs on home loan interest paid and up to INR 3 lakhs on home loan principal payment as deductions from IT every year for the tenure of the home loan.

During the time of repayment of the home loan, having the cushion of your spouse’s income as a backup is a fantastic option to have, especially when switching workplaces or when taking a break. The home loan EMIs have to be paid regularly irrespective of whether you take a break or switch jobs; hence having a joint home loan investment with spouse is a great option.

Joint Recurring Deposit Account

One of the traditional forms of investments is recurring deposits (RD). The returns and interest rate on such deposits are low to moderate, but they are a really good method to save for emergencies or as a contingency savings fund. Unlike other kinds of investments, recurring deposits do not come with any tax saving options. However, it will make sure that you and your spouse are sharing the load and helping each other in accumulating that contingency corpus.

Just the husband or the spouse putting a large sum of money into the recurring account is not a wise option; instead the rate of contribution to the RD can be distributed as per the disposable income of the husband and the wife. Money can be easily withdrawn prematurely from RD accounts for any occasion, including a family celebration, a vacation, or some kind of emergency.

Medical Insurance

Medical insurance does not offer any kind of monetary interest gains. It however acts as an asset and prevents the breaking of different investments and savings since medical insurance covers the cost of any treatments that has to be availed. Thus, one does not need to prematurely withdraw any money from varied investments, thereby ensuring that the investments and your financial future remain secure and protected.

Couples can select a family floater policy as it allows both the wife and the husband to claim a total tax exemption of up to INR 25,000 per year as per Section 80D of the IT Act. In order to ensure payment of the least sum in liquid currency for varied hospitalization and treatment bills, couple must opt for an insurance company with a widespread system of cashless hospitals across the country in its domain. Additionally, couples need to select an insurance policy that offers coverage for pre-existing illnesses, critical diseases, as well as certain medical procedures which can cost hundreds of thousands of rupees.

Mutual Funds

Mutual funds/MFs come with a high potential for growth and returns that can over the effects of high inflation as well as offer good returns after taxes. Couples can invest in mutual funds either via a lump amount investment; or via a systematic investment plan/SIP route in the name of the spouse; or via a plan carefully worked out upfront before jointly investing in MFs. There are several brokerage and MF houses that provide mutual fund accounts with joint holding. Such accounts can be held between two people or between not more than 3 account holders. All the people who invest in mutual funds under a joint account have to be KYC compliant.

Any person who wants to invest under joint names, but is not KYC compliant, will not be allowed to get added to the account as a joint holder. The workings of an MF joint account is similar to a joint account in banks, with the exception that just the main holder in the account has the option to claim tax benefits available for ELSS MFs if they are present in the MF portfolio.

Just like one shops on the internet on e-commerce sites, one can also open an MF account over the internet. Couple can visit any fund aggregator available online or directly purchase from the website of the fund house/brokerage firm. It is important to select a mutual fund with high ratings and a great performance track record for the MF investment to yield healthy returns consistently.