Are short-term investments for 3 months safe?

Most short-term investments like bank fixed deposits, treasury bills, and liquid funds are considered safe as they involve low risk and are often backed by government or reputed financial institutions. However, risk levels can vary with options like peer-to-peer lending, which may offer higher returns but come with moderate risk.

Can I withdraw my money before 3 months?

It depends on the investment type. Fixed deposits usually have a lock-in period, and early withdrawal may incur penalties. Liquid funds and high-yield savings accounts offer high liquidity, allowing you to withdraw money anytime without penalties. Always check the terms before investing.

Is investing for 3 months better than keeping money in a savings account?

Yes, investing in short-term plans generally offers higher returns than a regular savings account, while maintaining liquidity and safety. Savings accounts provide ease of access but usually have lower interest rates

Short Term Investment Plans for 3 Months

Short-term investment plans for 3 months are financial instruments designed to help investors grow their money safely and access it quickly within a brief period. These plans focus on capital preservation, liquidity, and modest returns, making them suitable for those who want to park funds temporarily without locking them in for long durations. Such investments are ideal for meeting near-term financial goals or managing surplus cash efficiently while minimizing risk.

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What are Short Term Investment Plans For 3 Months?

Short-term investment plans are financial products or assets held for a brief period, usually ranging from a few days up to three years, designed to offer liquidity, low risk, and moderate returns. These investments are ideal for investing funds temporarily while earning some interest or returns, without locking capital for long durations.

Best Short Term Investment Options for 3 Months

Below is the list of short term investment plan that you can consider investing in for 3 months:

Fixed Deposits (FDs)

Bank fixed deposits for three months offer a safe investment with fixed interest rates, generally higher than savings accounts. They ensure capital preservation and provide predictable returns with low risk.
Recurring Deposits (RDs)

Recurring deposits allow you to invest a fixed amount regularly over the tenure. Though typically for longer durations, some RDs can be structured for 3 months, offering stable returns and capital safety.
Treasury Bills (T-Bills)

Government-backed treasury securities with maturities as short as 91 days provide high liquidity and minimal risk, making them ideal for conservative investors seeking secure returns within 3 months.
Debt Mutual Funds (Short-Term Funds)

Short-term debt mutual funds invest in government and corporate bonds with maturities aligned to your investment horizon. They offer better yields than traditional savings accounts, high liquidity, and lower risk compared to equities.
Liquid Funds

A type of mutual fund investing in short-term money market instruments, liquid funds offer quick redemption (often within a day) and returns higher than savings accounts, suitable for parking surplus cash temporarily.
Peer-to-Peer (P2P) Lending

P2P lending platforms allow you to lend money directly to borrowers for short durations like 3 months, offering potentially higher returns (up to 12%) but with moderate risk. This is emerging as one of the best investment plans for 3 months for investors willing to take calculated risks.
High-Yield Savings Accounts

These accounts provide better interest rates than savings accounts while maintaining FDIC insurance and easy access to funds, suitable for risk-averse investors needing liquidity.

Things to Consider While Choosing The Best Investment Plans for 3 Months

Below are the things to consider while choosing a short term investment plan for 3 months:

Liquidity:

Ensure you can access your money quickly without penalties.
Risk:

Short-term investments generally favor low risk; avoid volatile options unless you have a high-risk appetite.
Returns:

Compare yields across options like FDs, debt funds, and P2P lending.
Safety:

Government-backed instruments like treasury bills and post office deposits offer capital protection.
Fees:

Mutual funds may have expense ratios; lower fees mean better net returns.

Conclusion

For a 3-month investment horizon, the best investment plan balances safety, liquidity, and return. Fixed deposits, treasury bills, and short-term debt mutual funds are excellent for conservative investors. For higher returns with moderate risk, peer-to-peer lending is a promising option. High-yield savings accounts and liquid funds also provide flexibility with better yields than traditional savings accounts.

FAQs

Are short-term investments for 3 months safe?

Most short-term investments like bank fixed deposits, treasury bills, and liquid funds are considered safe as they involve low risk and are often backed by government or reputed financial institutions. However, risk levels can vary with options like peer-to-peer lending, which may offer higher returns but come with moderate risk.
Can I withdraw my money before 3 months?

It depends on the investment type. Fixed deposits usually have a lock-in period, and early withdrawal may incur penalties. Liquid funds and high-yield savings accounts offer high liquidity, allowing you to withdraw money anytime without penalties. Always check the terms before investing.
Is investing for 3 months better than keeping money in a savings account?

Yes, investing in short-term plans generally offers higher returns than a regular savings account, while maintaining liquidity and safety. Savings accounts provide ease of access but usually have lower interest rates

˜Top 5 plans based on annualized premium, for bookings made in the first 6 months of FY 24-25. 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 01-05-2025

^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.

#The investment risk in the portfolio is borne by the policyholder. Life insurance is available in this product. The maturity amount of Rs 1 Cr. is for a 30 year old healthy individual investing Rs 10,000/- per month for 30 years, with assumed rates of returns @ 8% p.a. that is not guaranteed and is not the upper or lower limits as the value of your policy depends on a number of factors including future investment performance. In Unit Linked Insurance Plans, the investment risk in the investment portfolio is borne by the policyholder and the returns are not guaranteed. Maturity Value: ₹1,05,02,174 @ CARG 8%; ₹50,45,591 @ CAGR 4%

¶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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