Can I invest for just 3 years?

Yes, you can invest for a 3-year period. There are several financial products specifically designed for short-term investment horizons, such as FDs, gold, ELSS, savings accounts, and liquid funds.

Are 3-year investment plans safe?

Many 3-year investment plans, such as FDs, savings accounts, and certain debt funds, are considered low-risk. However, options with higher returns, like ELSS or equity funds, carry more risk. Always match your choice to your risk profile and investment goals.

Can I withdraw my investment before 3 years?

Some investment plans, like fixed deposits and ULIPs, allow premature withdrawal but may charge a penalty or reduce returns. Others, such as ELSS, have a mandatory lock-in period of three years, after which withdrawals are permitted without penalty.

How do market fluctuations affect 3-year investment plans?

Market-linked investments like equity mutual funds or ELSS are subject to volatility, which can impact returns within a 3-year timeframe. Debt instruments and fixed deposits are less affected by market fluctuations, offering more stable returns.

Best Investment Plan for 3 Years^~

Choosing the best investment plan for a 3-year horizon requires more than a generic approach—success lies in balancing returns, liquidity, and risk. In today’s dynamic market, options like liquid funds, short-term debt funds, fixed deposits, and select index funds stand out for delivering inflation-beating returns while ensuring your money remains accessible. A well-structured 3 year plan doesn’t just grow your wealth; it aligns with your specific financial goals and adapts to changing market conditions.

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What are the Best Investment Plan for 3 Years?

The best investment plan for 3 years refers to a financial strategy or product specifically designed to grow your money over a period of three years. These investment plans aim to balance returns and risks, offering investors an opportunity to achieve their financial goals within a relatively short timeframe. The focus is on maximizing returns while ensuring capital protection and liquidity, making them suitable for individuals seeking moderate growth with limited exposure to long-term market fluctuations.

Best Investment Plans for 3 Years

Investment Option	Typical Returns (per annum)	Liquidity	Risk Level	Lock-in/Minimum Tenure
Savings Account	5-7%	High	Very Low	None
Liquid Funds	5-6%	High	Low	None
Equity Linked Savings Scheme (ELSS)	Market-linked (variable)	Low (3-year lock)	Moderate-High	3 years
Debt-Based Mutual Funds	5-7% (approx.)	Moderate-High	Low-Moderate	Flexible
Fixed Deposits (FDs)	4-7%	Moderate	Very Low	Flexible (can be 3 yrs)
Ultra Short Duration Mutual Funds	5-6%	High	Low	None
National Savings Certificate (NSC)	~7.7%	Low	Very Low	5 years (premature exit rare)
Treasury Bills (T-Bills)	Varies (low-moderate)	High	Very Low	Up to 1 year
Fixed Maturity Plans (FMPs)	6-8%	Low	Low-Moderate	Fixed (e.g., 3 years)
Gold Investment	3-4%	Moderate	Low-Moderate	Flexible
Unit Linked Insurance Plans (ULIPs)	Market-linked (variable)	Low (3-year lock)	Moderate	3 years (min.)

List of Best Investment Plans for 3 Years

Savings Account:

A savings account is a secure place to park your funds with the flexibility to deposit and withdraw money as needed. Some private and small finance banks offer high-yield savings accounts with interest rates up to 6-7%. This option is highly liquid and safe, making it suitable for those who prioritize easy access to funds and minimal risk over three years.
Liquid Funds:

Liquid funds are a type of debt mutual fund that invests in short-term market securities such as government securities, corporate bonds, and treasury bills. They offer high liquidity, low risk, and moderate returns, typically in the range of 5-6% per annum. Liquid funds are ideal for conservative investors seeking better returns than a savings account without compromising on safety or accessibility
Equity Linked Savings Scheme (ELSS):

ELSS is a tax-saving mutual fund that primarily invests in equities and comes with a mandatory three-year lock-in period. It offers the dual benefit of potential high returns due to equity exposure and tax deductions under Section 80C. While returns are market-linked and can be volatile, ELSS is ideal for investors willing to take moderate to high risks for higher growth within a short time frame.
Debt-Based Mutual Funds:

These funds invest in fixed-income securities like bonds, treasury bills, and corporate deposits, offering stable and predictable returns. Debt mutual funds are suitable for conservative investors seeking lower risk and high liquidity. They provide flexibility in tenure and are less volatile compared to equity funds, making them a reliable choice for short-term goals.
Fixed Deposits (FDs):

Fixed Deposits are one of the safest investment options, offering guaranteed returns at a predetermined interest rate over a fixed tenure. FDs are available for various durations, including three years, and are ideal for risk-averse investors. Fixed deposits provide stable returns, flexible payout options, and allow premature withdrawal with a penalty.
Ultra Short Duration Mutual Funds:

These mutual funds invest in debt and money market instruments with maturities ranging from a week to 18 months. They offer higher liquidity and moderate returns, making them suitable for investors seeking a balance between risk and return over a short period. Their returns are relatively stable compared to equity funds.
National Savings Certificate (NSC):

NSC is a government-backed savings scheme with a fixed interest rate and a tenure of five years, but it allows premature withdrawal under certain conditions. It offers guaranteed returns, low risk, and tax benefits under Section 80C. NSC is suitable for those prioritizing capital safety and stable growth.
Treasury Bills (T-Bills):

T-Bills are short-term government securities with maturities of up to one year. They are considered one of the safest investment options as they are government backed. T-Bills offer moderate returns and high liquidity, making them ideal for conservative investors looking to park surplus funds for short durations.
Fixed Maturity Plans:

Fixed Maturity Plans are closed-ended debt mutual funds with a fixed tenure, often matching the investor’s desired investment horizon, such as three years. They invest in fixed-income securities and aim to provide predictable returns by holding investments until maturity. FMPs are less liquid than open-ended funds but can offer higher returns than regular FDs due to their tax efficiency and structured approach.
Gold Investment:

Investing in gold, either through physical gold, gold ETFs, or sovereign gold bonds, can help diversify your portfolio and hedge against inflation. Over a three-year period, gold typically offers moderate returns (about 3-4% per annum) and is considered a safe haven during economic uncertainty. However, returns can be volatile and are influenced by global market trends.
Unit Linked Insurance Plans (ULIPs):

ULIPs combine investment and life insurance, allocating a portion of your premium to market-linked funds and the rest to insurance coverage. They offer flexibility to switch between fund options based on your risk profile and have a minimum lock-in period of three years. ULIPs are suitable for those seeking disciplined investment, growth potential, and insurance protection in one plan.

Benefits of the Best Investment Plan for 3 Years

High Liquidity: Easy access to funds for emergencies or short-term goals.
Diversification: Allows spreading investments across different assets to reduce risk.
Lower Risk Exposure: Shorter duration means less exposure to market volatility.
Stable Returns: Options like FDs and debt funds offer predictable returns for better planning.
Flexibility: Adjustable investment amounts, easy withdrawals, and reinvestment options.
Goal Setting: Helps manage income, save for short-term needs, and encourages disciplined investing.
Market Protection: Acts as a safety net, offering quick access to funds during market uncertainties.

Conclusion

A well-chosen 3-year investment plan enables you to maximize returns while maintaining flexibility and minimizing risk. By aligning your investment with your financial goals, risk appetite, and need for liquidity, you can effectively manage your wealth and prepare for upcoming expenses. Whether you opt for mutual funds, fixed deposits, or government schemes, a disciplined approach to short-term investing can provide stability and growth, helping you meet your financial objectives with confidence.

FAQs

Can I invest for just 3 years?

Yes, you can invest for a 3-year period. There are several financial products specifically designed for short-term investment horizons, such as FDs, gold, ELSS, savings accounts, and liquid funds.
Are 3-year investment plans safe?

Many 3-year investment plans, such as FDs, savings accounts, and certain debt funds, are considered low-risk. However, options with higher returns, like ELSS or equity funds, carry more risk. Always match your choice to your risk profile and investment goals.
Can I withdraw my investment before 3 years?

Some investment plans, like fixed deposits and ULIPs, allow premature withdrawal but may charge a penalty or reduce returns. Others, such as ELSS, have a mandatory lock-in period of three years, after which withdrawals are permitted without penalty.
How do market fluctuations affect 3-year investment plans?

Market-linked investments like equity mutual funds or ELSS are subject to volatility, which can impact returns within a 3-year timeframe. Debt instruments and fixed deposits are less affected by market fluctuations, offering more stable returns.

˜Top plans are based on annualized premium, for bookings made through https://www.policybazaar.com in FY 25. Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by any insurer. This list of plans listed here comprise of insurance products offered by all the insurance partners of Policybazaar. For a complete list of insurers in India refer to the Insurance Regulatory and Development Authority of India website, www.irdai.gov.in

Past 10 Years' annualised returns as on 01-08-2025

^The tax benefits under Section 80C allow a deduction of up to ₹1.5 lakhs from the taxable income per year and 10(10D) tax benefits are for investments made up to ₹2.5 Lakhs/ year for policies bought after 1 Feb 2021. Tax benefits and savings are subject to changes in tax laws.

*All savings are provided by the insurer as per the IRDAI approved insurance plan.

Tax benefit is subject to changes in tax laws. Standard T&C Apply
++Source - Google Review Rating available on:- http://bit.ly/3J20bXZ

^^The information relating to mutual funds presented in this article is for educational purpose only and is not meant for sale. Investment is subject to market risks and the risk is borne by the investor. Please consult your financial advisor before planning your investments.

¶Long-term capital gains (LTCG) tax (12.5%) is exempted on annual premiums up to 2.5 lacs.

**Returns are based on past 10 years’ fund performance data (Fund Data Source: Value Research).

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