Claim Settlement Ratio of 99.23%~

4 Ways You Can Spend Your Annual Bonus - Know How To Invest Money

For most of the salaried professionals, this time of the year brings in much joy and a sense of achievement. You get your annual bonus besides your usual monthly salary - just like the icing on top of a cake. While many of you will be tempted to spend all your bonus as it is an "additional income", there are many ways in which you can invest this extra income to improve your financial wellbeing and achieve your financial life goals.

Investment plans also act as tax-planning tools, as many avenues help reduce tax liability. There are different types of investment plans, and by choosing the right one, you can invest according to your needs and grow your savings.Read Less

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Written ByPalak Bagadia
AboutPalak Bagadia
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Palak Bagadia, Associate – Digital Marketing at Bajaj Allianz Life, with experience spanning content and performance marketing, recruitment, employee engagement in the BFSI industry.
Reviewed ByRituraj Singh
AboutRituraj Singh
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Rituraj Singh,With over 6.5 years of experience in the insurance industry, Rituraj Singh, Manager- Product & Brand Marketing at Bajaj Allianz Life Insurance overlooks new product launches, compliance, and brand projects, leveraging artificial intelligence and technology to enhance outcomes.
Written on: 7th July 2024
Modified on: 7th July 2024
Reading Time: 15 Mins
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1. Pay off any credit card debt or loan debt you may have accumulated:

Having unpaid credit card bills not only costs you a lot of extra money in late fees and interest but also lowers your creditworthiness and rating, which is not good for your overall financial well-being. Use your bonus to pay off any credit card bills that are unpaid. This will not only bring up your credit score but ease off a huge financial burden from your head. Similarly, if you have received a substantial end of the year bonus you can use this as an opportunity to reduce your bigger loans: home loans, education loans amongst others. This will give you the opportunity to use your usual monthly income for other expenses.

2. Evaluate your life goals

Use your bonus as an opportunity to review your long and medium-term goals and how your finances need to be adjusted to achieve the same. Once you have understood your financial needs for the upcoming years, you can use your bonus to invest in a plethora of options, including a new age ULIP plan that will help you build a corpus for fulfilling your life goals. If you have already invested in a ULIP, use the additional bonus income towards top-up investment on existing ULIP and take part in the burgeoning markets. However, ensure you have done proper research and mitigated the risks before investing in markets.

3. Add to your rainy day fund

Your bonus can be the perfect opportunity for you to add into your rainy day fund or set up one if you have not done so already. It is recommended to have enough in your rainy day fund to cover anywhere from three months to one year of expenses, including monthly EMI payments, rent, school fees, electricity and water bills, amongst other expenses.

4. Invest in yourself

Your bonus offers you the perfect opportunity to reinvest in yourself. Use the bonus amount to hit the gym or join the music class you wanted to take or just pamper your family with special gifts. This will make you feel happier and healthier, and you will know you've put your money to good use.

The bonus that you receive is a reward for all the hard work you have been putting in. While it can be confusing to think of all the ways you could spend this additional income, remember to take a second and remind yourself of the fact that you have earned this because of your hard work and determination to achieve your work goals. You must hence enjoy your bonus and make it memorable by putting it to good use.

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~Tax benefits as per prevailing Income tax laws shall apply. Please check with your tax consultant for eligibility.

**Past performance is not indicative of future performance.

The above information is for general understanding and is meant to educate the general public at large. The reader will have to verify the facts, law and content with the prevailing tax statutes and seek appropriate professional advice before acting on the basis of the above information.

In this policy, the investment risk in investment portfolio is borne by the policyholder. Investment in ULIPs is subject to risks associated with the capital markets. The policy holder is solely responsible for his/her decisions while investing in ULIPs. The views stated in this article is not to be construed as investment advice and readers are suggested to seek independent financial advice before making any investment decisions. For more details on risk factors, terms and conditions please read sales brochure & policy document (available on www.bajajallianzlife.com) carefully before concluding a sale.

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*Tax benefits as per prevailing Section 10(10D) and Section 80C of the Income Tax Act shall apply. You are requested to consult your tax consultant and obtain independent advice for eligibility before claiming any benefit under the policy.

~Individual Death Claim Settlement Ratio for FY 2023-2024

1Premium Holiday has to be selected at inception to avail this benefit and also depends on other policy terms & conditions


Bajaj Allianz Life Insurance Co. Ltd. | IRDAI Reg. No. 116

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%%Above illustration is for Bajaj Allianz Life eTouch- A Non Linked, Non-Participating, Individual Life Insurance Term Plan (UIN: 116N172V03) considering Male aged 25 years | Non-Smoker | Policy Term (PT)– 30 years | Premium Payment Term (PPT) – 30 years | Sum Assured opted is Rs. 1,00,00,000 | Online Channel | Standard Life | 1st Year Premium is Rs. 6,238. 2nd Year onwards premium is Rs. 6,659. Total Premium Paid is Rs. 1,99,349 | Medical Rates | Yearly Premium Payment Mode | Death benefit opted is lumpsum payout and monthly installments (Lumpsum Payout Percentage : 45, Income Payout Percentage : 55) | Premium shown above is exclusive of Goods & Service Tax/any other applicable tax levied, subject to changes in tax laws, and any extra premium and is for illustrative purpose only. This is inclusive of all the discounts mentioned above.

##Tax benefits as per prevailing Section 10(10D) and Section 80C of the Income Tax Act shall apply. You are requested to consult your tax consultant and obtain independent advice for eligibility before claiming any benefit under the policy.Above Tax benefit is calculated considering deduction of Rs. 150,000 and applicable tax rate of 31.20%.

@Term Insurance plan bought online directly from Bajaj Allianz Life Insurance has no commissions involved.

^^The Return of Premium amount is total of all the premiums received, exclusive of extra premium, rider premium and GST & /any other applicable tax levied, subject to changes in tax laws
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