When looking at the suitable investment options, you must choose your investment options based on your liquidity requirements, tenor and risk appetite. Safe investment options like fixed deposits are good short-term investment options that provide you with flexibility and safety of deposit to earn assured returns.
What is a short-term investment?
A short-term investment refers to allocating funds to financial instruments with relatively brief maturity periods, typically ranging from a few days to a few years. Unlike long-term investments, short-term investments are intended for capital preservation or quick returns rather than prolonged wealth accumulation. Common examples include money market instruments, FDs Post-Office Time Deposits, short-term bonds, etc.
These investments offer liquidity, allowing investors to access their funds quickly, making them suitable for individuals with immediate financial goals or those seeking to take advantage of market opportunities. While short-term investments may yield lower returns compared to long-term options, their flexibility and reduced exposure to market fluctuations make them valuable for managing short-term financial needs or maintaining a liquid portion within a diversified investment portfolio.
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
- Savings account
- Fixed deposits
- Recurring deposits
- National Savings Certificate
- Liquid Funds
- Investments in NCD's/ Corporate or Company Deposits
- Treasury Securities
- 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 fixed deposit rates in India first before making a decision.