10 Best Short Term Investment Plans in India

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A barrage of questions passes through our minds on hearing the word 'investment'. Where to invest? How to invest? How much to invest? What will be the results? Is it safe to invest? These are just few of the many questions that pile up in our brains when we think of securing capital.

Investment altogether is a necessity for a financially secured future. There are basically of two types of investment - long term and short term. While almost every investor is aware of long term investments, there are a lot of misconceptions and confusions that plague short term investment options.

What are Short Term Investment

Short term investment options are designed to provide considerable returns in a fairly short span of time which can be a year or even a few months. These plans are more focused to meet the expected near future expenses.

Usually investors who are more inclined towards short-term investment options aren’t really interested in waiting for years in order to get their money multiplied many times over. Instead, they look for quick and effective results. This is where short term investment plans come to their rescue.

With short term investment plans, one can expect optimum returns to meet their financial objectives, but not massive results as in the case of long-term investments. Owing to the lower risks associated with short term investment plans, they often rank high on the popularity charts of seasoned investors.

Highlights of Short-Term Best Investments Options

  • Short turnaround time
  • Optimum returns for less investment
  • Lesser investment amount
  • High liquidity
  • Low risk

Now that you know about the highlights of short term investment options, let’s check out top ten best short-term investment plans from the virtual ocean of investments.

Best Short Term Investments

Sr No.

Short Term Investment Options

Highlights

 1

Gold/Silver

Better liquidity

 2

Savings Account

High Liquidity/Safer Returns (4%-7%)

 3

Debt Instruments

Risk free/ High returns (up to 10.5%)

 4

Recurring Deposit

Safe investment/good returns

 5

Large Cap Mutual Funds

High returns

 6

Treasury Securities

High liquidity/Safety returns

 7

Stock Market /Derivatives

High Returns

8

Fixed Maturity Small Investment Plans

High tax efficiency

9

Money Market Account

Low risk/Great returns (4%-7%)

10

NCD's/ Corporate or Company Deposits

Attractive interest rates (9% - 12%)

Now, let’s get to know about these amazing short term investment plans in details.

Best 10 Short Term Investment Plans for 2018 and Beyond

Gold or Silver

Gold and silver are just like the ever growing trees of investment forest, handy for both long and short-term investments. These investment instruments are sure to give huge returns as the price of gold and silver keeps increasing every day. So, if you are looking for a secured and risk-free short term investment plan for 2017 and beyond, you’ll need to invest in gold or silver. Remember, the sheen of these metals is not going to fade away, not now or anytime sooner.


Savings Account


For the ones who hate to take risks, savings account is the best short term investment plan to invest in. The returns are not very substantial but there is zero risk percentage and high liquidity. Here it is important to know that savings accounts in different banks are offered at different interest rates. So don’t forget to check out the interest rate offered by the bank before opening a savings account in your intended bank.


Debt Instruments


Debt instruments are yet another brilliant short term investment plans, especially for risk-averse individuals. Securing capital and providing good results with no fear of market volatility, debt mutual funds are good place to invest. Offering returns as high as up to 10.5%, this is a good choice for short tenure savings.


Recurring Deposit


Most of us jump to this option when talking about secure investments. One can choose between a Postal Recurring Deposit and a Bank Recurring Deposit. This amazing short term investment plan allows you to invest on a monthly basis. Usually, banks offer recurring deposits with a minimum lock-in period of 6 months and maximum period of 1 year. An individual has all rights to withdraw his money before the maturity date, but it is better to withdraw money after maturity to get all the benefits associated with it.


Large Cap Mutual Funds


Large cap mutual funds are those where the investment is made selectively in the stocks of large business organizations to achieve substantial growth in a shorter period of time. These excellent short term investment plans can give you quick and smart returns within 1 to 3 years of investment tenure.

 

Treasury Securities


Treasury securities or the treasury bills are another good short term investment plans offering high liquidity, safety and satisfying returns. Their maturity dates vary from 91 days to 365 days.


Stock Market /Derivatives


Shares, commodities and derivatives are a favourable avenue for people possessing good market knowledge and high risk appetite. This investment can be made for a short or long time span depending upon the financial objectives of the investor.


Fixed Maturity Small Investment Plans


FMPs or Fixed Maturity Plans are closed ended debt funds. These are transparent and flexible short term investment plans with a definite end date. They have high tax efficiency and only dividend distribution tax is applicable on it.


Money Market Account


Popularly known as liquid funds, money market accounts are designed to give you security of capital as well as worthy returns. With a maturity time limit of 91 days, these do not possess any lock-in period and offer high liquidity and least risk among mutual funds.


Investments in NCD's/ Corporate or Company Deposits


Last, but certainly not the least, short term investment plan on our list is NCD or a company deposit. This scheme allows you to select a secured NCD (Non-convertible debentures) for securing your capital. In addition, it offers attractive interest rates varying from 9% to 12%.


Wrapping it Up!

Now you don't need to ponder anymore on issues like where and how much to invest. If you're looking to invest your money in short-term investment plans, then above mentioned investment options could be the best destinations for you to stop-think-invest.

Short Term Investment’s - FAQs

Q. What are best short term investments?

The best short term investment options are:

  • Savings Account
  • Recurring Deposit
  • Gold or Silver
  • Debt instrument
  • Stock Market/Derivatives
  • Large cap mutual fund
  • Treasury securities
  • Money market fund

Q. What is classified as a short term investment?

The short term investment are classified as investment plans that get matured within a time period of 1 year and are considered liquid. Short term investments are best for individual who wants to gain high returns on investment in a short period of time.

Q. Which investment gives highest return?

Large cap mutual fund gives higher returns on investment.

Q. How long is short term investment?

The tenure of short term investment can be 1 year or less.

Q. Are Prepaid expenses a short term investment?

Yes, prepaid expenses are short term investment because prepaid amount is used up or expires within 1 year of balance sheet date.

Q. Which policy is best in LIC for short term?

LIC Jeevan Saral is the best short term investment plan.

Q.  Which mutual fund is best for short term?

Large cap mutual fund are the best short term investment option which gives higher returns on investment.

Q. What is a short term investment example?

A short term investment are investments made for a shorter duration of 5 year or less. The returns of short term investment can be easily liquidated to cash at the time of maturity. Some of the examples of short term investments are:

  • Savings Account
  • Recurring Deposit
  • Gold or Silver
  • Debt instrument
  • Stock Market/Derivatives
  • Large cap mutual fund
  • Treasury securities
  • Money market fund

 

Q. What are cash and short term investments?

Short term investment and cash are the sum of two balance sheet line items. Both are considered a liquid asset.

Q. What is short term debt fund?

Short term debt funds are also known as income fund in mutual fund scheme which has a maturity period of less than 3 years. These funds majorly invests in debt instruments like corporate bonds, government securities, etc. and is best suitable for individuals who wants to fulfill their short term investment goals.

Q. What are the benefits of investing in short term investment?

Some of the benefits of short term investment are:

  • Short duration of time
  • High flexibility
  • High liquidity
  • Transparency

Q. Is a short term investment an asset?

Yes, short term investment is an asset.