6 Best Short Term Investment Plans in India With High Returns - IIFL Insurance

Top 6 Short Term Investment Plans That You Should Know About

How to earn more money? Is it wise to choose short-term investments? This is the most obvious question that can strike your mind, and you should know the options available in the markets. 

Short-term investments are the best option for you that will help accomplish your financial goals. Let us take the example of Ramesh, who came from a rural area and moved to a nearby city for a job. Few companies offered jobs with low salaries. Initially, he faced difficulties in managing his finances. However, he aimed to start a business and quit his job to find a new one. He has no idea about short-term investment and found mutual funds advertisement in a railway station.

Then, he got valuable insights into short-term mutual funds, made lump-sum amounts with minimum investments, and invested the same in other plans. Now, he runs his shop that sells household appliances and earns good profits too. That’s why you should also consider investing money in short-term plans which have lower risks than others. 

With short-term investments, you can ensure financial freedom that will help manage unexpected expenses. It offers you the flexibility to withdraw money whenever required without waiting for a long time. Moreover, you can make substantial profits within a short period as short-term investment plans provide stability, liquidity, and low transaction costs, thereby showing ways to avoid unwanted problems significantly. 

Here are some plans that allow you to ensure better returns in a quick turnaround time. 

List 6 Best Short Term Investment Plans in India 2021

  1. Fixed Deposits 
  2. Mutual Funds 
  3. Fixed Maturity Plans 
  4. Debt Funds
  5. Recurring Deposits
  6. Corporate Bond Funds

 

1. Fixed Deposits 

A fixed deposit is one of the best short-term investment plans for you because it is more secure. Banks offer interest rates for fixed deposits starting from 2.5% to 5.5% per annum, depending on the number of years. They range between seven days to five years, and you can put the money in FD for at least three years. Start your fixed deposit account in more banks so that you can avoid losses while withdrawing the amount from one account. 

2. Mutual Funds 

A mutual fund is another option that allows you to earn healthy returns within three months compared to your regular savings account. At the same time, make sure that you pick some of the best short-term mutual funds that will help you gain more advantages. Take some time and get ideas from experts and or other sources before investing your money. You can even search for the information online that gives ways to make the right decision. Some of the advantages offered by mutual funds include;

  • Flexibility to invest in smaller amounts. 
  • Schemes for every financial goal 
  • Easily accessible, and you can buy mutual funds from anywhere in the world 
  • You can redeem the units at anytime 
  • Diversification allows you to reduce risks 
  • Less cost for bulk transactions 
  • Quick and hassle-free process 
  • Automated payments

3. Fixed Maturity Plans 

A fixed maturity plan enables you to get higher yields in the debt market. If you want to make more money than a fixed deposit, you can consider selecting this plan to increase cash flow. Furthermore, the taxation is similar to debt funds, and you can generate high revenues. 

4. Debt Funds

Debt funds are security investments that generate fixed income and have a fixed maturity date and interest rate. They are one of the best short-term investment options available in the markets, and you can ensure high protection from market fluctuations. In addition to that, you can invest in low-quality debt instruments to earn higher returns. Some debt funds include liquid funds, money market funds, dynamic bond funds, corporate bond funds, credit risk funds, etc. It is a type of mutual fund that allows you to earn better returns.

5. Recurring Deposits

A recurring deposit is one of the best short-term investments because it has a minimum tenure of 6 months. You can start saving money in recurring deposits by creating an account in banks, post offices, and NBFCs. The primary advantage of RD is that it allows you to earn a fixed interest at a frequent interval after investing money. Moreover, you can withdraw the funds before the maturity date during emergencies. Another thing is that it provides ways to avail a loan based on the amount invested by you. Different types of RD plans for your family, and you can select the right one accordingly.  

6. Corporate Bond Funds

A corporate bond fund is an excellent short-term investment 2021 option because it allows you to ensure high profits compared to government bonds. Leading corporations will issue bonds to raise funds for expanding their business. It is less vulnerable to inflation and offers more interest rates. Apart from that, the bond is less risky and volatile than other stocks. On the other hand, you should consult with financial experts before investing money in corporate bond funds. This, in turn, paves ways to increase your cash flow, enabling you to generate high income. 

Therefore, if you aim to fulfill short-term goals or even accumulate funds quickly, then short-term plans are the best options. 

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