10 Best Short Term Investments

It is designed to provide considerable returns in a short span of time which can be a year or even few months.Short term investment normally refers to an investment for duration of 1 year to 5 years.you can opt to invest in various short term investments options which can earn you good returns. Investing in short term investment options increase the value of your money and lowers your risk of running out of finances when you really have a pressing situation

Highlights of Short-Term Investments:-

>Short turnaround time
>Optimum returns for less investment
>Lesser investment amount
>High liquidity
>low risk

 Here's the list of 10 best short term investment options available in the         market.

Savings Account:–

For the ones who hate to take risks, savings account is the best option to invest in. The returns are not very substantial but yes there is zero risk percentage and high liquidity. Savings account in different banks are offered at different interest rates.

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Fixed Deposits:-Fixed deposit is perhaps the safest investment option available today. You get a fixed interest of 4 percent to 11 percent. You are not allowed to withdraw before the maturity period is over. The maturity period varies from as less as 10 days to as long as 10 years. You start to receive your interest amount 3 months after deposit. In case of premature withdrawal, there'll be some penalties. Fixed deposit accounts offer income tax benefits.

 Gold Investment:-

Investing in gold is also a smart option as the price of the gold increases day by day and sheen over the yellow metal never fades.The demand for gold is always increasing. . Investment in gold is a good option for both long term and short term time period.For the last five  years gold has provided almost 24 percent return on investment It is observed that investment in gold has provided almost 24 percent yearly returns in the last 5 years. There are various options to invest in gold.

Money Market Funds:-

Popularly known as liquid funds, money market accounts are designed to give you security of capital as well as worthy returns.It's a short term, low risk, and low return investment. These funds have a high liquidity and are managed to provide the investor with a fixed current income. Governments and large corporations issue securities in order to reach some short term financial goal.  The average maturity of money market fund is 90 days or less in order to avoid risk of fluctuating interest rate. Common examples of money market instruments are Certificate of deposit and Commercial paper.

Debt Instrument:-

Debt instruments are a good investment option specially for risk-averse individuals. Securing capital and providing good results with no fear of market volatility,.This is essentially a loan you are giving to a government or a corporate entity. You are given a guarantee of getting back your principal amount along with a fixed interest in regular intervals. So it provides a steady income and your principal remains safe. The investment period is 1 to 3 years. These come as corporate deposits and NSCs. debt mutual funds are good place to invest. Giving returns upto 10.5%, this is a good choice for short tenure savings

Fixed Maturity Plans:-

Fixed maturity plans are close ended debt schemes with a pre decided maturity date that invest in money market instruments that mature on or before the date of maturity to nullify the interest rate risk. The main advantages of investing in fixed maturity plans include absence of risk, high interest rate and attractive after tax benefits.

Certificate of Deposit:-

These offer higher returns but only after the duration of the CoDs maturity period comes to an end. It is a safer option for investment.A certificate of deposit is sold by banks. It has a fixed maturity period. You are given a guarantee of getting back your principal investment and a fixed rate of interest is decided ahead. So you know ahead how much you will get at the time of maturity. Premature withdrawal is not allowed. This is a low risk, low return investment.

Treasury Bills:-

Treasury securities or the treasury bills are a good investment option offering high liquidity, safety and satisfying returns.Treasury bills are issued by the Reserve Bank of India, to meet the short term financial needs of the government. These are sold through fortnightly and monthly auctions. The minimum amount of investment is  1lakh. Interest rate is determined by the market. The maturity period is either 91 days or 364 days. These are low risk and highly liquid investments.

Commodities:-

Stock market investment has a high risk rate. For those risk hungry investors this is a good option. Commodities and derivatives are gaining popularity in India and offer good investment avenue.Commodities trading protects you against inflation. It offers high liquidity unlike investments in equities or bonds. You can buy and sell as and when it suits you. Commodities trading is done on margins, so you have to pay only a fraction of the actual price to the broker. Though commodities trading is a risky investment option, it yields high return on investment.

Bonds:-

A bond is a loan given by the investor to a government or corporate entity. The borrower promises the return of the principal amount at the end of a period called maturity period and a fixed rate of interest at regular intervals. It is risk free investment option. These offer high liquidity. Investing in bonds offers you a good chance to diversify your investment profile.

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