Is financial independence just a myth that one may only dream of accomplishing but never quite attain? According to existing research and leading experts in the field, the answer is perhaps a resounding no. Although it might seem like a distant and fleeting dream, financial independence and security is achievable as long as you plan well.

Financial Planning from an early age

It is easy to get overwhelmed when you become responsible for your own finances for the first time and are suddenly expected to manage your daily expenses, long-term goals, faraway retirement plans, etc. However, there is literally no better time than your 20s to start your financial planning and think big, dream big, and act big. Below are a few financial principles you can start practicing in your 20s that will help set you up for financial freedom and long-term success:

Understand compound interest and valuation

People shouldn't overlook the concept of inflation and its consequences while making long-term financial decisions. The more you save, the more the rate of interest that gets added to the principal amount. Do not underestimate or misjudge the power of compounding.

Generating passive income

The best form of freedom can be created by the generation of passive income. It is essential to find out ways in which your income is maximized while the work time is minimized.

Staying away from bad debts

The money that is borrowed using pay-day loans, credit cards, and short-term loans can result in huge debts. Therefore, it is better to avoid these debts with high-interest rates until and unless there is any kind of emergency or a financial crisis.

Equity investment in your financial portfolio

People who invest in equities reap higher rewards than those who invest in other avenues for the same short period of time. The trick is to plan well and invest in high-reward, low risk avenues like equities, especially if you intend on gathering sufficient wealth to ensure financial security for the rest of your life.

Adopting the SIP route

Systematic Investment Plan (SIP) guides an investor to invest in a manner in which the magic of compounding works in favor of them.

Under Section 80C of the Indian Income Tax laws, investments of up to Rs.1.5 Lakhs in a financial year in eligible securities are exempted from tax. HDFC Tax-Saving Mutual Funds act as a breather in your long-term investment, keeping in mind it cannot be redeemed before 5 years. 

Judicious investment for a smart financial eco-system

Investment opportunities such as Term Deposits or Fixed Deposits (FDs) allow an investor to park any surplus funds for an interest income. This scheme is for a pre-determined period and a fixed interest rate.

Investment opportunities such as HDFC Fixed Deposits range for a time period of 12 to 84 months and interest rates range between 5.30% to 6.45% p.a. The interest income earned here is taxed under Tax Deducted at Source (TDS) as per the Income Tax Act, 1961.


To enjoy the biggest financial freedom of your life, it is important to save and invest in a wise manner. There isn’t any perfect age to start your investment. While you are taking your first baby steps, HDFC Sales is there to guide you throughout, helping you plan and invest judiciously so you may achieve financial independence all through your life.

Disclaimer: Mutual Fund investments are subject to market risks, read all scheme related documents carefully. 

Disclaimer: Interest rates are subject to change from time to time. For detailed Terms and Conditions, visit; Toll Free: 1800 266 3345.