Short Term Investment Plans with High Returns

What are the best short-term investment plans for 2025? Check out the best short-term investment plans in India to meet your financial goals quickly.
Short-term investments are great, but a high-yield FD ensures safety and stability
4 mins
06-June-2025

When choosing the right investment, consider your liquidity needs, investment duration, and risk appetite. If you prefer safety and flexibility, fixed deposits are a reliable short-term option that offer assured returns without exposing your money to market risks.

Looking for the best short-term investment? Instead of letting your funds sit idle, earn up to 7.30% p.a. with a Bajaj Finance FD—secure and high-yielding! Start Investing.

What is a short-term investment?

A short-term investment involves putting your money into financial instruments that mature in a few days to a few years. Unlike long-term investments, these are meant for quick returns or preserving capital rather than building wealth over time. Common examples include money market instruments, fixed deposits, post office time deposits, and short-term bonds.

Short-term investments offer high liquidity, making it easy for investors to access their money when needed. They are ideal for meeting immediate financial goals or seizing quick market opportunities. While returns may be lower than long-term options, their flexibility and lower market risk make them useful for managing short-term needs or keeping part of your portfolio liquid.

Fixed Deposit

  1. Trusted by over 5 lakh customers
  2. Fixed Deposits worth more than Rs. 50,000 crore booked
  3. Rated CRISIL AAA/STABLE and [ICRA]AAA(STABLE)
  4. Up to 0.35% p.a. extra interest offered for senior citizens
  5. Flexible interest payout options available - Monthly, Quarterly, Half-yearly, Annually or at Maturity

By proceeding, you agree to our Terms and Conditions

8 best short term investment options in India

If you’re looking for secure ways to invest your money for steady, risk-free growth, the following options are ideal for you.

The best short term investment options available in India are the following

  1. Savings account
  2. Fixed deposits
  3. Recurring deposits
  4. National Savings Certificate
  5. Liquid Funds
  6. Investments in NCD's/ Corporate or Company Deposits
  7. Treasury Securities
  8. Post-Office Time Deposits

Read along to know more about these savings schemes and find out which is the best option to grow your savings.

1. Savings account

As one of the preferred choices of most people, savings accounts offer maximum liquidity. This helps you withdraw funds anytime and anywhere without any hassles. However, with an interest rate hovering around 4%, a savings account is not the best investment vehicle unless you constantly need access to all your funds.

2. Fixed deposits

Fixed deposits are easily among the best options for short-term investments. They offer a high rate of return, independence from market fluctuations and interest rate volatility, and high flexibility in terms of tenor period. You can also withdraw your deposit during times of emergency by paying a penalty. The interest on FD is taxable after your earnings cross Rs. 10,000.

The safety of capital and surety of returns has increased the popularity of fixed deposits as investments. Enjoy additional features like fixed deposit calculator that help you calculate returns and plan your investments accordingly. You can opt for a hassle-free online fixed deposit application with some of the leading financiers. You can check FD interest rates first before making a decision.

Pro tip

Bajaj Finance offers attractive Fixed Deposit interest rates of up to 6.95% p.a. for non-senior citizens, and up to 7.30% p.a. for senior citizens, inclusive of an additional rate benefit of up to 0.35% p.a.

3. Recurring deposits

If you prefer not to invest a lump sum upfront, recurring deposits are a flexible option that allow you to invest a fixed amount every month. You can open an RD account at your local bank or post office. The tenure typically ranges from 6 months to 10 years. Note that the interest earned is taxable.

4. National Savings Certificate (NSC)

This investment option has a tenor of 5 years. Then, all you need to do is visit your post office and complete a simple application process. An advantage of NSCs is that you can claim tax exemptions under section 80C of the Income Tax Act. But, again, the interest earned is taxable.

5. Liquid funds

Liquid funds are a type of mutual fund that invest your money in short-term government certificates or securities. An investor can withdraw money from these funds at any time. However, it is not prudent to allocate your emergency funds into this option, because gaining complete access to your cash back takes around 2 or 3 days.

Liquid funds offer you a higher interest rate of up to 7%. Moreover, since the money in these funds is invested in money market instruments, you can expect a comparatively higher amount of security for your investment.

6. Investments in NCD's/ Corporate or Company Deposits

Non-Convertible Debentures (NCDs) and corporate/company deposits are issued by companies to raise capital. They offer higher interest rates than traditional bank FDs. However, it's crucial to research the issuer's creditworthiness before investing in these instruments.

7. Treasury Securities

Government securities, like Treasury Bills (T-Bills), are highly secure short term investment. They are issued by the Reserve Bank of India (RBI) on behalf of the government. T-Bills come in various tenures and are an excellent option for risk-averse investors.

8. Post-Office Time Deposits

Post Office Time Deposits, offered by India Post, are among the most secure fixed-return investment options, especially trusted in rural and remote areas. These deposits ensure capital safety and guaranteed earnings, making them a preferred short-term savings choice.

  • Tenure Options: Available for 1, 2, 3, and 5-year durations.
  • Payout & Liquidity: Interest is paid annually. Premature withdrawal is not allowed within the first 6 months.
  • Interest Rates:
    • 1 Year – 5.5%
    • 2 Years – 5.5%
    • 3 Years – 5.5%
    • 5 Years – 6.7%

Interest earned is added to the investor’s taxable income and taxed as per the applicable slab rate.

While short-term investments provide quick returns, an FD gives you guaranteed growth with high liquidity.

Earn up to 7.30% p.a. with a Bajaj Finance FD today! Check FD Rates.

Explore Life Insurance policies

In addition to the options mentioned, life insurance policies offer policyholders a dual benefit of savings and investment along with life cover. With growing awareness, these policies are becoming increasingly popular. Bajaj Finance Insurance Mall provides life insurance plans with coverage of up to Rs. 1 crore, offered by top insurers. This platform serves as a comprehensive solution for all insurance needs, enabling you to compare and select the best life insurance policy online. Secure your financial future and that of your loved ones with affordable premiums. Explore the available plans below.

How Short-Term Investments Work

Short-term investments are financial instruments designed for a brief investment horizon, typically ranging from a few months to a few years. They operate on the principle of preserving capital while generating reasonable returns in a relatively short period. Here's how they work:

1. Liquidity and Accessibility

Short-term investments emphasize liquidity, allowing investors to access their funds quickly and without significant penalties. This makes them suitable for short-term financial goals and unforeseen expenses.

2. Investment Options

Short term investments encompass a variety of options, such as Savings account, Fixed deposit, Recurring deposits, National Savings Certificate, Liquid Funds, Investments in NCD's/ Corporate or Company Deposits, Treasury Securities, Post-Office Time Deposits. These options differ in terms of risk and return potential.

3. Returns

Short-term investments typically offer lower returns compared to long-term options like stocks. However, they provide stability and capital preservation.

Benefits of Short-Term Investment Plans:

1. Quick Returns
Short-term investments offer the advantage of faster returns, often maturing in less than a year. This allows you to reinvest your earnings or use them to meet other immediate financial needs, unlike long-term options that require years to deliver returns.

2. Lower Risk
These investments usually carry lower risk, especially when backed by government or reputable corporate guarantees. Their shorter duration also limits exposure to market volatility, making them ideal for risk-averse investors.

3. Greater Flexibility
Short-term investment plans give you the freedom to choose how much to invest, how often to invest, and the tenure that suits your goals. You can also pick from a variety of instruments based on your risk appetite and liquidity needs.

4. Easy Accessibility
Most short-term investment options are readily available on online platforms, making it easy to invest and manage your portfolio from anywhere. This accessibility ensures convenience and control over your finances at all times.

Highlights of Good Short-Term Investments

Here are some key highlights of good short-term investments:

1. Safety

Opt for investments that prioritise the safety of your principal amount.

2. Liquidity

Look for investments that offer easy access to your funds without incurring substantial penalties. Liquid funds and savings accounts are known for their high liquidity.

3. Risk-Adjusted Returns

Evaluate investments based on their risk-return profiles. Understand that some options, like equity-linked investments, might offer higher returns but come with higher risk.

4. Suitability

Ensure that your chosen short term investment align with your financial goals and investment horizon.

What makes a good short-term investment?

1. Liquidity

A good short-term investment should be easily convertible to cash, providing quick access to funds when needed.

2. Low Risk

Minimising risk is crucial for short-term investments; opt for instruments with lower volatility and stable returns.

3. Short Maturity Period

Choose investments with shorter time frames, aligning with your specific financial goals and minimising exposure to market fluctuations.

4. Interest Rates

Consider investments with competitive interest rates to ensure optimal returns within the chosen short time horizon.

5. Safety and Security

Prioritise safety by selecting instruments issued by reputable entities or backed by government guarantees.

6. Diversification

Diversify short term investment across various instruments to spread risk and enhance overall portfolio stability.

7. Tax Efficiency

Explore tax-efficient short-term investment options to maximise returns after accounting for applicable taxes.

8. Ease of Management

Opt for investments that are easy to manage, requiring minimal ongoing attention and administrative efforts.

How to calculate returns from short term investment plans?

To calculate absolute returns on short-term investments, use the formula:

ROI = (End Value - Initial Value) / Initial Value × 100

This gives the return on investment percentage. Alternatively, an ROI calculator can simplify the process.

Also read: What is Small Savings Scheme

 

Things to consider while investing in short term investment plans

Before choosing a short-term investment, consider the following key factors:

1. Capital Safety
Protecting your principal should be a top priority. Opt for low-risk instruments that offer stable returns without putting your capital at risk. Government securities, high-quality bonds, and certificates of deposit are generally considered safer options.

2. Liquidity
Ensure the investment offers easy access to your money when needed. Short-term plans should be easily redeemable with minimal delay or penalty. Instruments like money market funds and select bonds typically provide high liquidity.

3. Tax Implications
Returns from short-term investments are taxed as per your income tax slab. Different instruments come with varying tax treatments—some may be subject to TDS, while others, like certain fixed deposits, may offer tax-saving advantages. Always factor in the tax impact before investing.

Conclusion

In conclusion, short-term investments are an integral part of financial planning, providing flexibility, liquidity, and capital preservation. By understanding how they work, assessing your requirements, and focusing on the highlights of good short-term investments, you can make informed decisions to achieve your short-term financial objectives.

Calculate your expected investment returns with the help of our investment calculators

Investment Calculator

Fixed Deposit Calculator

Sukanya Samriddhi Yojana Calculator

PPF Calculator

Recurring Deposit Calculator

Provident Fund Calculator

Gratuity Calculator

Frequently Asked Questions

What is the tenure of Short term Investment Plans?

Short term investment plans typically have a tenure ranging from a few days to a few years, providing flexibility for investors with varying financial goals and timeframes.

Which short term investment plan can give the highest return?

Identifying the short term investment plan with the highest return depends on factors like risk tolerance and market conditions.

What are some examples of short-term investment?

Examples of short-term investments include money market funds, FDs, certificates of deposit (CDs), and short-term government or corporate bonds.

What is a short-term debt fund?

A short-term debt fund is a type of mutual fund that primarily invests in debt securities with shorter maturities, providing potential returns while managing interest rate risks.

Is a short-term investment an asset?

Yes, a short-term investment is considered an asset as it holds intrinsic value and has the potential to generate returns or be converted into cash.

Which is the safest short-term investment?

Generally, safer short-term investments include government securities, high-quality corporate bonds, and money market funds, providing stability and reduced risk.

What are the benefits of investing in short-term investment?

Benefits of short-term investments include liquidity, reduced exposure to market volatility, and the ability to meet immediate financial needs, making them suitable for specific financial goals and risk appetites.

Which short-term investment offers the best combination of returns and safety?

If you want guaranteed returns without market risks, Fixed Deposits are a smart choice. Earn up to 7.30% p.a. with Bajaj Finance FD, ensuring high liquidity and steady growth. Open an FD Now.

Show More Show Less

Bajaj Finserv app for all your financial needs and goals

Trusted by 50 million+ customers in India, Bajaj Finserv App is a one-stop solution for all your financial needs and goals.

You can use the Bajaj Finserv App to:

  • Apply for loans online, such as Instant Personal Loan, Home Loan, Business Loan, Gold Loan, and more.
  • Invest in fixed deposits and mutual funds on the app.
  • Choose from multiple insurance for your health, motor and even pocket insurance, from various insurance providers.
  • Pay and manage your bills and recharges using the BBPS platform. Use Bajaj Pay and Bajaj Wallet for quick and simple money transfers and transactions.
  • Apply for Insta EMI Card and get a pre-qualified limit on the app. Explore over 1 million products on the app that can be purchased from a partner store on Easy EMIs.
  • Shop from over 100+ brand partners that offer a diverse range of products and services.
  • Use specialised tools like EMI calculators, SIP Calculators
  • Check your credit score, download loan statements and even get quick customer support—all on the app.

Download the Bajaj Finserv App today and experience the convenience of managing your finances on one app.

Do more with the Bajaj Finserv App!

UPI, Wallet, Loans, Investments, Cards, Shopping and more

Disclaimer

As regards deposit taking activity of Bajaj Finance Ltd (BFL), the viewers may refer to the advertisement in the Indian Express (Mumbai Edition) and Loksatta (Pune Edition) furnished in the application form for soliciting public deposits or refer https://www.bajajfinserv.in/fixed-deposit-archives
The company is having a valid Certificate of Registration dated March 5, 1998 issued by the Reserve Bank of India under section 45 IA of the Reserve Bank of India Act, 1934. However, the RBI does not accept any responsibility or guarantee about the present position as to the financial soundness of the company or for the correctness of any of the statements or representations made or opinions expressed by the company and for repayment of deposits/discharge of the liabilities by the company.

For the FD calculator the actual returns may vary slightly if the Fixed Deposit tenure includes a leap year.