10 cant miss short term investment options

Last Updated: Wed, Sep 05, 2018 18:11 hrs
Rupee (AP image)

"The key to making money is to stay invested"

We all want a secured future and we are planning several different things to attain the same. There are many investment options that help us in securing our present and future. You can go for short term or long term investment options for the same. Depends upon liquidity, perception, and returns, you can easily choose among different financial products. If you are looking for investing money for a short tenure then you must go for short-term investment options. The tenure of such investment options is less than a year. The risk in this short-term investment option is nil and you can easily expect decent returns from it.



Advantages of short-term investment

Liquidity
Low risk
Optimum returns on investment
Quick turnaround time

Popular short term investment options keep funds

To make the most of your investment, you can consider following short-term investment:-

Savings Account

When it comes to the savings account, you can easily get around 3.5 percent returns per annum. Moreover, you can keep funds in your savings account and can use it in case of an emergency. The interest that you earned would be around Rs 10000 per year and that to will be exempted from the income tax. You can withdrawal the money using your atm, debit card, cheque, etc. There are a few banks that offer around 6 % interest on your savings.

Fixed deposits

You can easily open a fixed deposit for a short tenure. The tenure of such investment will be less than a year. The interest that you will earn on a fixed deposit will be more than the interest of savings account. You can also go for the longer investment option and you can close the FD before the due date. Fixed deposits are the safest mean of investment. There is no such risk in saving your money in public and private banks.

Recurring deposits

Recurring deposits from post offices is one of the popular modes of investment. You can take the help of a bank for opening a recurring deposit account. You can open a recurring deposit account using your internet banking as well. Whenever you need to funds you can close your recurring deposit account. The amount will be credited to your savings account.

Debt Funds

Debt funds are a safer option. The returns generated by debt funds is less than the equity funds. For short-term investment options, you can go for debts funds investment and that too for 6 to 18 months. You must first examine the type of funds and then invest in the same.

Treasury Bills

Treasury Bills which are popular by the treasury securities are famous for offering high returns. They offer really high liquidity. That's why you can consider them as the best short-term investment that can help you in fulfilling your financial needs. The returns of this investment are higher than the bank's deposits. The tenure of such investment is from 91 days to 365 days.

Money Market Instruments

These are the liquid funds. The greatest advantage of this fund is the security. The returns of such funds vary from 4% to 10% per annum. The returns of such investment are higher than ultra short-term funds.

Certificates of deposits

Certificates of deposits which is offered by various reputed firms are a great mode of investment. With this form of investment, you can earn up to 12% per annum.

Gold/Silver

For a short-term investment, gold and silver is the good option. It is true that silver and gold will increase every day. Thus, you can retain gold and silver for better returns. FMP is highly taxed efficient and can offer the best returns. You can buy the pure gold bar and gold coins to get huge returns.

Fixed Maturity Plans

These are close-ended debt funds. Under the same, an investor should invest in the same for fixed returns. It can offer huge returns. It is a tax efficient investment. You should avoid investment in income, dynamic, MIP, and gilt funds as the investment horizon are long and the risk is high.

Arbitrage funds

Well, if you hold the investment for more than a year then you can earn up to 8% interest after adjusting the tax. Those who are looking for tax-efficient investment should go for arbitrage funds. Under the same, the equity exposure will be hedged and the risk level will be low. It is important for you to know about the exit load before making any investment.

Conclusion

There are various forms of short-term investment option in India. You can choose several products according to your risk, appetite, liquidity, and returns as well. These will bring huge returns so that you can enjoy benefits easily.

Naval Goel is the CEO and Founder of PolicyX.com

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