Everyone has a list of goals that they wish to accomplish at different life stages. While the goal and the stage maybe different for everyone, the denominator is common: money. You need stable finances to be able to accomplish your goals. You can invest your money in different short-term investment products to get quick returns, especially if you have any immediate goals lined up. Keep reading to know short-term investment options you can consider for your goals.
List of short-term investment products:
Here are some of the short-term investment products that you can add to your investment plan:
- Savings accounts
The first option for everyone is a savings account. It is one of the easiest and safest way to access your money. Although the returns on it are low, savings accounts provide you with liquidity. The rate of return is mostly limited to 6-7%.
- Liquid Funds
Also known as debt funds, these are kind of funds that invest in short-term government certificates, securities and bonds. You can invest in them and withdraw your funds from them as per your convenience. Returns between 4-7% are given post tax. Due to its short-term nature, you can either invest your money for a few days or for a few months. As the money is invested in options where the risk almost low, your fund value will remain unaffected.
- Recurring deposits (RDs)
In this type of secured investment, you can invest money on a monthly basis and not in a lump sum manner. Banks are the preferred option for people when it comes to RDs. With banks, you get to invest in an RD for a tenure beginning from6 months up to of 10 years. The other option is the postal RD. The rate of interest of RD may vary from one bank to another. Do keep in mind that the returns are subject to taxes.
- National Savings Certificate (NSC)
If you want to invest for a period of 5 years with a planned expense around the same time, you can go for this option. The scheme allows you to claim tax deduction under Section 80C of Income Tax Act. However, do keep in mind that tax is levied on the interest.
- Debt Mutual Funds
Debt mutual funds are one of the many lucrative investment options if you want to invest for a period of 3-5 years. Debt mutual funds offer market-linked variable returns. With debts funds, your investment and returns remain safe despite market fluctuations. If you wish to get tax benefits on your long-term capital gains, stay invested in it for at least 3 years. If you withdraw before 3 years, surrender charges would be deducted from the pay-out. Stay invested in the scheme to avoid paying any charges.
- Equity Mutual Funds
You can invest in these mutual funds for less than five years. However, due to the risk of market fluctuation involved in equity markets, it is advised to stay invested for a longer period. Even though, equity funds may allow withdrawals after only 12 months of investments, your capital may suffer from an early withdrawal. With SIP, you can easily start investing in equity mutual funds. Systematic Investment Plan, i.e., SIP, allows you to invest a sum that you can manage without burdening your expenses. Thus, it is easier for your investment to be profitable.
Conclusion
These are some of the short-term investment products that you can consider investing in for your immediate goals. Before you start with investments, ensure to develop a better understanding of what your requirements are. This will help you in making an informed decision.
The investment calculator can be helpful in giving you an idea about how much you should invest as per your requirement. Similarly, you can consult a financial advisor to get more information about the products mentioned above and other such short-term investment products that you can invest in.
