Don’t Ignore These Rewarding Short-Term Investments
Are you looking for the best investment plan?
There has never been a better moment to start thinking about investing. The whole country is under lockdown, and people are spending more time inside; there is enough room to organise their budgets properly.
Though the COVID-19 pandemic continues to haunt the world, life goes on. You must fulfil specific duties such as paying for your children’s education, repaying loan EMIs, saving money for starting a business, etc. In order to achieve these short-term goals, short-term investment is the best option.
The primary motivation for choosing short-term investment is to earn returns in a shorter period of time, primarily to achieve certain short-term financial objectives.
This is also known as goal-based investment, in which you decide whether to remain for the short or long term depending on the objective you want to attain. There is no set time frame for short-term investing; however, being involved for seven days to 1 year is considered short-term.
Most people think of bank savings accounts when they think of saving money, but alternative short-term investing choices provide superior returns. We guide you through such prospects that will assist you in building money in the near term.
What are Short-Term Investments?
Short-term investments are assets that may be turned into cash or sold in a relatively short period of time, usually within 1-3 years.
Short-term bonds, Treasury bills, and other money market funds are common products for short-term investment. Short-term or day trading involves a high level of speculation and, as a result, a high level of risk.
What are the benefits of short-term investments?
You must put your money to work to get a solid return, and the finest short-term investments do the same. However, there are other reasons why you should use them as your primary savings option.
Disciplined Savings
Investing demands more discipline than anything else in life, which is obtained by investing in short-term funds. Begin by investing a little bit of money each month in the best investment plans, and it will quickly build to a significant corpus. Begin making short-term investments now and watch as your objectives are realised with pinpoint accuracy if you prepare correctly.
Flexibility
As the name implies, these investments are made for the short term, allowing you to withdraw or modify your investment objective within that time frame.
No lock-ins require you to remain involved for the long term, so you may change direction if the investments do not provide consistent returns or you are losing money.
Diversification
There’s a widespread phrase in the financial world: “Don’t put all your eggs in one basket,” which implies don’t invest all your money in one asset class. This reduces the danger of capital loss while taking advantage of the growth opportunities given by other asset groups.
For example, you may choose the finest stock to purchase in the short term and also invest in short-term mutual funds to maximise your gains while being secure. These short-term investments allow you to make the most of your diversification approach, increasing your profits.
Best Short Term Investment Plans with High Returns in India
Let’s have a look at the best investment plans in India that provide better returns on investment to help you realise your short-term objectives, as listed below:
1. Recurring Deposits (RD)
This is the most frequent short-term investment option utilised by many people to protect their money for short-term requirements since it is available at all banks. It lets you receive a set rate of return on your investment till maturity.
Simply login into your net banking account will allow you to start a recurring deposit (RD) account. Please choose the amount to save each month and the duration, and you’re done!
2. Fixed Deposits (FD)
Fixed Deposits (FDs) are another common technique for banks to build a corpus for short-term investments. The money is invested for a certain length of time, usually 7 to 10 years, at a preset rate of return, and then it matures, allowing for withdrawal. Although the interest rates are more extensive than those offered by savings accounts and RDs, there is no option for early withdrawal.
3. Debt Mutual Funds
Like other money market products, these mutual funds typically invest in debt securities such as government bonds, treasury bills, commercial papers, and corporate bonds. This is one of the greatest short-term investing alternatives for risk-averse investors seeking higher short-term profits.
4. Stock Market
Stock markets are the ideal short-term assets for high-risk takers to invest in and maximise rewards. If you can identify the proper stocks, invest in them for a few months to double your money. If you gamble on the incorrect stocks, you might lose your whole investment.
5. Savings Account
In India, savings accounts are one of the most popular and best investment plans. It is a bank or financial institution deposit account where you may store your surplus cash and earn interest. It offers maximum liquidity since consumers may withdraw their deposited funds at any time. Furthermore, there is no deposit restriction, and numerous banks provide zero balance accounts.
6. National Savings Certificate (NSC)
The National Savings Certificate (NSC) is another best investment plan that saves taxes and is accessible at post offices. Because it is a government-backed plan, it is low risk and provides set returns. However, NSC interest rates are subject to change regularly according to choices made by the Finance Ministry.
7. SIP in Equity Mutual Funds
Systematic Investment Plans (SIP) operate best in the long term, but they may also be used for shorter periods of time to provide acceptable returns. If you have a one-year investing horizon, it is recommended that you start a SIP in big-cap mutual funds since they invest in large firms that may increase quicker in the market.
A power of compounding calculator refers to a calculator that increases mutual fund returns. The initial investment’s interest is reinvested to gain interest on interest. In other terms, it is about profiting from profiting.
The power of compounding calculators can help you understand how compounding adds to long-term wealth building. It can help you make critical financial decisions and manage your money more effectively.
Wrapping It Up
Short-term investments are the greatest way to achieve your short-term financial objectives. Short-term investments may provide financial flexibility and help you handle unforeseen costs. Furthermore, it allows you to withdraw money whenever you need it without having to wait a lengthy period.
Furthermore, you may earn huge returns in a short period of time since short-term investment plans give consistency, liquidity, and minimal transaction costs, demonstrating methods to prevent undesired situations greatly.
