Introduction
Short-term investments with short periods of a year or two can be done and can still provide you substantial returns. It may be used to buy jewelry, arrange a vacation, buy any asset or do whatever you might need shortly.Â
There are various profitable one-year investing strategies that might help you generate rapid money. You might also think about reinvesting your short-term investment profits, which can assist you to save for the future.
Best Short Term Investment Plan
Fixed DepositsÂ
Fixed Deposits (FDs) are common schemes for banks to build a portfolio for short-term investments. The investment is made for a set length of time, usually 7 days to 10 years, at a defined rate of return, and then it grows dynamically, enabling withdrawal. It usually offers a greater rate of interest which may be up to 5.5% per annum.
Recurring Deposits
It is one of the most frequently used short-term investment options utilized by many people to safely deposit their funds for short-term requirements, as it is available in all financial institutions. It lets you receive a set rate of return on your investment till maturity. The rate of interest could be as high as 6% per annum and the duration may range between 6 months to 10 years.
Debt Mutual Funds
Debt mutual funds invest mainly in debt securities such as treasury securities, treasury notes, bills of exchange, and other money market products. This is one of the best short-term investing alternatives for investors seeking higher short-term profits with minimal risk. The duration of the investment may range between 6 months up to 3 years and can offer a rate of return up to 11% per annum.
Corporate Deposits
Similar to bank fixed deposits, the main distinction is that these deposits are gathered by corporations for the purpose of investment and operation. Because the danger of default is greater, the rates of returns are significantly high than on bank FDs. Those with a risk tolerance can invest in these corporate FDs and receive higher returns than bank FDs. The interest rate might be as high as 8% per year, with terms ranging from one to three years.
Stock Market
Stock markets are the finest short-term investment option for high-risk players to engage in and achieve big rewards. If you can identify the proper shares, and engage in those for a few weeks you may be able to even multiply your capital. Though if you gamble without a proper strategy on the incorrect stocks, you might lose your whole investment.
SIP Investment
Systematic Investment Plans (SIP) perform best in the long term, but they can also be used for a short period of time to provide excellent 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 can increase quicker in the market. The annual interest rate could be as much as 15%, with durations varying from six months to five years.
Short-term investments are the greatest way to achieve your short-term financial objectives. You can secure financial freedom and assist handle unforeseen costs by making short-term investments. Furthermore, it allows you to withdraw money should you need it and does not require you to wait for ages. Furthermore, because short-term investment plans give consistency, you may generate significant returns in a short period of time.