Introduction to best short term investments

People with excess money wants to go for an investment. But there are 2 options available to them, it could be in the form of short term investment or long-term investment plans. The short term ranges from a few months to a maximum of 5 years and long term investments are those that exceed the span of 5 years. People invest in the best short term investments to get good returns in a short period of time with less risk involved.

Also read Best mutual funds schemes to consider investing in 2019

Investing in short term capital ensures these things primarily:

  • Safety of capital
  • Return on capital
  • High liquidity
  • Low risk
  • Lesser investment involved

What is the process of investing in mutual funds

Best short term investments plan in India

Serial No.Best Short term investments optionsHighlights
1.Gold/silverBetter liquidity
2.Savings accountHigh liquidity/safer returns (4-7%)
3.Debt instrumentsRisk-free/high return (up to 10.5%)
4.Recurring depositsSafe investments/good returns
5.Large-cap mutual fundsHigh returns
6.Treasury securitiesHigh liquidity/safety returns
7.Stock market/derivativeHigh returns
8.Fixed maturity small investment plansHigh tax efficiency
9.Money market accountLow risk/great returns (4-7%)
10.NCD’s/Corporate or Company depositsAttractive interest rates (9-12%)

Gold/silver (Best short term investments)

Investments made in gold can be short-term or long-term and it’s safer too, making it one of the best short term investments schemes as the prices of gold will always rise with the passage of time. You can buy gold in the form of bars or coins. You can also buy standard gold or pure gold from the jewelers or reputed refineries as well.

Gold bonds offered by the government is a good option, but it lacks liquidity. But if you invest in exchange-traded gold funds, there is liquidity attached to it.

Savings fund (Best short term investments)

It is one of the best short term investment options from other investment schemes and provides the maximum liquidity to the investors. Though it is not the most advisable as the returns are around 4% approximately. Unless you want cash at dispense all the time, we highly recommend you to try other options.

Debt funds (Best short term investments)

In the case of debt funds, the money is invested in for a period of 6-18 months. The returns are fixed and free from market fluctuations. There is little to no risk involved in this type of investment. Also, taking the benefit of SIP, this investment is one of the best on the list.

How to Invest in SIP that is Best for You

Recurring deposits (Best short term investments)

In this scheme, the money is invested on a regular basis instead of a lump sum. The period of investment could be between 6 months to 10 years and the returns are taxable as well. The account for recurring deposits could be opened at your nearest post office or a financial institution.

Large-cap mutual funds (Best short term investments)

Any money invested in large-cap mutual funds promises high returns in both short-term and long-term investments. You can expect quick and high returns within a tenure of 1-3 years.

Mid cap funds -Who and how to invest in it

Treasury Bills (Best short term investments)

Treasury Bills, also known as Treasury securities are a better investment option than the savings account, as there are higher returns. The investment made is for a duration of 91 days to 365 days.

Stock market (Best short term investments)

Investments that are made for a period of fewer than 5 years is considered the best short term investments plan in the stock market. Options of Intraday trading, buying today & selling tomorrow or any other short term trading fall under stock trading and not stock investing.

However, for the sake of calculating short term capital gains tax, money invested for a period of fewer than 12 months is taken into account.

Fixed maturity small investment plans (Best short term investment)

Money invested in this scheme has a minimum lock-in period of 3 years and acts like fixed deposits. The returns are high, it’s safe from the market fluctuations and is considered the best short term investments plan among the rest. The tax is charged on the returns of more than Rs. 10,000.

Tax charged on mutual funds

Money market accounts/Liquid funds (Best short term investment)

The investments made in liquid funds scheme is in government securities or certificates. The returns are 7% approximately but if you want complete access to your money, it can take 2-3 days. As the money is invested in money market instruments, then you can expect higher returns as well. The investors can invest in it for as short as a day or 90 days and even longer.

National Savings Certificate (Best short term investment)

The investments made in this scheme is for a period of 5 years lock-in. That is, one should invest in this scheme if one would want money in future prospects. But there is a tax exemption under section 80C of the Income-tax Act. The returns are taxable as well.

However, what you may not know is that selecting the best short term investments plan is much easier than you think. We, at WealthBucket, the online mutual fund investment portal, are committed to providing you with the best advice and services related to investments. Our services include short term mutual funds, Liquid funds, Debt mutual fund or Large Cap mutual fund. Open your mutual fund account with us & make your money grow exponentially.

Give us a call at +91 8750005655. Or email at contact@wealthbucket.in

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