Best Short Term Investment Options

Mutual Funds

These are considered to be one of the best avenues for investment in our country. Amongst mutual funds, equity mutual funds are in particular extremely popular. In fact, such is the earning potential of equity mutual funds that some of the best performing funds have generated Cumulative Average Growth Returns of about 20 percent in a span of a decade.

Mutual funds are another form of investment that generates higher income over a period of time. It’s a common pool of money where multiple investors invest in equities, bonds, and other market instruments. As an investor, you can buy mutual fund units in any particular scheme and these units can be cashed based on the fund’s Net Asset Value . Mutual fund schemes other than close-ended and ELSS schemes do not have a minimum investment period.

    The point to note is that with such high rewards come high risk as well. It is advised that you consult financial experts before making any decisions. There are many types of portfolios and styles of investing, but with mutual funds, you can access the best of all and generate good income. Investment in these is very simple, and with the Systematic Investment Plan (SIP) you can start with as little an amount as INR 500 a month.

Fixed deposits

Fixed deposits are often hailed as one of the most stable and safe investment options for 3-year investment period. It is advisable to invest in various FDs because of the following reasons:

  • Accumulate higher returns by availing FD schemes from credible financiers
  • Hassle-free renewals provide you the benefit of compounding, and help you increase your savings
  • Deposit Credit Guarantee Corporation of India insures all bank FDs up to Rs.1 lakh, which ensures better security
  • Greater stability, where you needn’t fear about depreciation of your principal amount
  • Assured returns and greater liquidity

Company fixed deposits (FDs)

These are much better compared to bank fixed deposits (FDs) because they yield a higher rate of interest. You have to select the investment period carefully because you can’t withdraw the money before maturity. Company FDs carry no insurance benefits and are not monitored by the RBI. Nonetheless they are among the best investment options in India. They have an amount of risk. Investing in good companies with a proven track record will serve your investment goals.

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