The purpose of short-term investment is to offer a decent amount of returns in a short period where the short period can be either months or years. Such plans are centre on fulfilling the need to cover the potential future expenses. As opposed to long term investment plans, short term investments plans are where one can get considerable returns so that the financial objectives can be likewise fulfilled.
We have jotted down the following investment plans that will help you to make an informed decision:
Short-Term and Ultra-Short Debt funds
This is the best investment plan for 1 year that has been opted for by many people or groups of people. In this type of investment p, the landplane maturity period ranges from 1 year up to 3 years. These funds are known as low-risk funds that provide average returns to the investors out there. There are many times when these kinds of investment plans have been compared with the fixed deposits or FD. But there is a difference between FD and short-term debt funds. Short term debt does not invite any kind of penalty if it has been redeemed before maturity whereas FD does.
This is the best investment plan for 3 years that is available for all the investors out there. The money in this investment plan is put into a government certificate and securities of deposits. Hereafter the investment, you can leave it anytime depending upon your will but you should avoid throwing the budget that you have labelled as an emergent budget because then the redemption will take approx. 2 days. In this, you can estimate 4 to 7 per cent of put-up tax return on the liquid funds which is considered as a higher interest rate available. Considering, these funds have money invested in money market instruments; there will be a higher amount of security that will be available for the investment.
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Bank Fixed Deposits
This is one of the short investment plans that have the highest return investment. In this, the individual has to put some amount in the bank for a decided period. This fixed deposit is also labelled as the safest short-term investment option that is available out there where it provides a fixed interest rate on the investment thus offering a legit return. In current times, fixed deposits provide an interest rate of 8-9 percent for more than one year of the designated investment. It has to be kept in mind that the interest rate in such types of fixed deposits will not fluctuate even though the market is volatile.
If you are one of those investors who constantly need access to all of your funds then saving accounts is the best short-term investment as it has an interest rate of 4%. This type of investment is preferred by most people. Saving accounts is known to provide a major amount of liquidity. Through such saving accounts, an individual will be able to withdraw funds anytime and anywhere they want.
Above are some of the best short term investment plans in India that are available that you can give a shot to. There are some best shares to buy for the short term, all you need to do is analyze thoroughly and make a decision that will benefit you in the right way. These short-term investment plans are good in their way. If the right short term investment plan is used then it will greatly act as an advantage to the very investor.