Best Short Term Investment Plans

Namaskar! Are you in the hunt for a short-term investment plan that is sure to multiple your returns on the investment manifold? Well, we at Coverfox may have the right answers for you!

This article details the best short term investment plans in India with special focus on their features, benefits & review. Read and compare return rates of different plans, premium amounts, and tenure. Read more about the plans below!

There are times when you want to invest in a scheme where your money will be safe and you can withdraw it whenever you want. However, with the plethora of such schemes being made available in the market today, selecting the best one remains a task!

Short Term Investment Plans 2018-19

Let’s have a look at some of the best short term investment plans as below:

Savings Account

Though interest rates are the lowest, the savings accounts is one of the best short term investments with the highest liquidity. Interest rates vary between 4% and 7% and this depends on the duration and the bank.

Bank Fixed Deposits

These are not as liquid as savings accounts and withdrawals before maturity attracts a penalty. The fixed deposit rates differ when it comes to different banks and different tenures.

Liquid Funds

These are schemes offered by mutual funds. They invest in certificates of deposit, corporate debentures and treasury bills issued by the government. There is no penalty on withdrawal and liquidity is high.

Fixed Maturity Plans

Liquidity is low in such schemes as they are close ended with a lock-in period of normally 3 years. These are similar to bank FDs. You get higher interest rates and the benefit of long-term capital gains tax which gives you greater post tax returns.

Recurring Deposits

These schemes are available with both banks and post offices. The advantage of this scheme is that you can invest small amounts every month and on maturity you get the principal and interest.

Bonds

These are loans given by investors to corporate entities or the government. There is low risk and low liquidity. The rating of corporate bonds is important as high-rated bonds offer more safety of principal and interest.

Treasury Bills

The Reserve Bank of India issues treasury bills and they can be purchased fortnightly or monthly when they are auctioned. The minimum investment amount is Rs. 1 lac and maturity period is between 91 and 364 days.

National Savings Certificate (NSC)

Issued by the postal department of India, NSC has a 5-year maturity period. You get the principal and interest on maturity. The interest is taxable. NSC investment gives you tax benefits under Section 80C of the Income Tax Act. There is also a penalty on premature withdrawal.

Short Term Floating Rate Funds

These mutual funds invest in both, fixed and floating rate securities as interest rates are floating. You can expect a stable income for a specific period. This is a low risk investment.

Certificate of Deposit

These investment schemes are issued by banks and have a fixed maturity period. As the interest rate and principal is predetermined, the risk and returns are both low. You cannot, however, withdraw your investment before maturity.

Debt Instruments

When you want to invest funds for a short term period and ensure safety of principal, short-term debt instruments are the best choice. They are low risk and low return options.

Gold

Gold is a hedge against inflation and will provide stability in your portfolio when there is a stock market crisis. The best way to invest in gold would be through Exchange Traded Funds (ETFs) and mutual funds.

Benefits of Short Term Investments

Short term investments are low-risk, low-return products which are normally made when you need to ensure stability of principal and interest as well as high liquidity.

There are certain features that are common to short term investments like:

Low risk.
High liquidity.
Low but stable returns.
Income tax exemption for some investments like NSC.
Lock-in period for specific investments like fixed maturity plans.

FAQs on Best Short Term Investment Plans

Are CDs a good investment?

Certificates of deposits are a good short-term investment for stable returns and protection of capital.

Are ETF a good investment?

Yes. ETFs are good investments as you can invest in different asset classes like equity and gold to create long-term wealth.

Are ETFs good for short term investing?

Yes. There are debt ETFs which are good short-term investing options.

Are savings bonds a good investment?

Yes. Taxable and tax-free saving bonds issued by the Government of India are good investment options.

How can I grow my money?

You can grow your money by starting to invest early in a mix of equity and debt investment options for the long term.

How can I invest money wisely?

To invest money wisely you need to diversify your investments between low-risk low return as well as high-risk high return options.

How can I make a good investment?

In order to make a good investment, educate yourself about the various options available online or consult an investment professional.

How do I invest my money to make money?

In order to create wealth, you need to have a long-term horizon and invest in equities.

How do I plan my investments?

To plan your investments, you need to first identify your long-term financial objectives like retirement and short-term financial objectives like the deposit for your home, as well as your emergency funds.

Is real estate a good investment?

Real estate is a good investment provided you understand the right time to enter the market and find a location with good growth prospects.

Is S & P 500 a good investment?

If you are looking at long-term wealth creation, then the S&P 500 is a good investment.

Is there any investment that is free of risk?

Yes, investments that are guaranteed by the government are free of risk.

What are cash and short term funds?

Cash and short-term funds are the most liquid forms of investment.

What are investment plans?

Investment plans are tools which help you achieve your financial objectives like your retirement or buying a house.

What are low risk investments?

Low-risk investments are those that ensure safety of principal invested and stability of returns.

What are the four types of investments?

There are four asset classes that you can invest in, namely equity, debt, real estate and gold.

What are the best assets to own?

The best assets to own are those that diversify your risk. So you need a mix of equity, debt and gold to get a stable portfolio.

What are the best long term investment options?

The best long-term investment options are equity mutual funds including diversified equity funds, thematic funds, and balanced funds.

What are the best short term investment options in India?

The best short-term investment options in India are NSC, fixed deposits and liquid funds.

What are the best short term investment options?

The best short-term investment options are savings accounts, liquid funds, and fixed maturity plans.

What are the best short term investments?

The best short-term investments which will provide safety of capital and stable returns are savings accounts, fixed deposits and recurring deposits.

What are the best Vanguard funds?

The best Vanguard funds are Vanguard Total Stock Market Index and Vanguard 500 Index.

What investments return fast?

If you are looking at quick returns, then the best investment are short-term investments like liquid funds which invest in short-term products like treasury bills.

What is a safe short term investment?

A safe short-term investment is the one where the principal is safe and returns are stable.

What is an example of a long term investment?

The best example of a long-term investment would be a diversified equity fund.

What is an example of a short term investment?

The best example of a short-term investment is a liquid fund.

What is SIP account in banking?

The SIP account in banking is an auto-debit facility that allows you to make investments in mutual funds.

What is the best investment to make money?

If you are looking at wealth creation and have a long-term horizon (more than 10 years), then direct equity or equity mutual funds are the best options for you.

What's the best return on investment?

The best return on investment would be the one that helps you meet both your long term financial objectives like retirement and short-term financial objectives like emergency funds.

Where can I invest money safely?

If you are looking at safety of your investments, then your best choice would be savings accounts, recurring deposits, liquid mutual funds, and so on.

Where can I invest my money for long term in India?

Equity or equity based mutual funds are the best long term investment options.

Where can I invest my money without risk?

The best options for low risk investments are liquid funds, floating rate funds and so on.

Where should I invest money to get good returns?

While good returns are normally associated with long-term investments like equity, short-term investments can also provide good returns, though lower than equity but with greater stability.

Which is best plan for investment?

If you are risk averse, then short term investments are your best choice where the principal is safe and returns are stable but low. Best options would be liquid funds, floating rate funds and fixed maturity plans.

Where should I invest my money?

Your investment choice would depend on when you need your money. If you need to withdraw your money quickly and without paying a penalty, then you should invest your money in savings accounts or liquid funds.

Which is the best option to invest money in India?

India offers various short-term and long-term investment options. Some of the best short-term investment options are debt funds, bonds, and fixed deposits. Long-term investment options include stocks and equity mutual funds.

Which plan is best for investment?

The best investment plan would depend on your time horizon. If you need the money before 3 years, then short-term mutual funds and fixed deposits would be the right choice.

Which LIC policy is the best for a short term?

LIC policies are long term investments, though some plans give you the option of taking loans against the surrender value.

Be Safe and Secure in the Short-Term

Short-term investments provide you with liquidity and are low risk, low return investments. They are important features to have in your portfolio to provide stability. So, choose the right instrument and enjoy stable returns.