Every individual would have pressing need of money in short term. There are several other reasons why you may not be able to invest money for long term. If you are one among the investor who is looking for best short term investment options, this article is for you. There are various short term investment options available now which can provide your good returns. I have identified 10 short term investment options which can be invested from 3 months to 3 years period to get high returns.
10 Best Short Term Investments Options available now
1) Debt mutual funds: Debt mutual funds invest majority of the portion in fixed income debt securities. Debt mutual funds are best suitable for those who want to take less risk and get higher returns compared to bank fixed deposits. Invest in debt mutual for a period of 1 to 3 years to get good returns. The returns in the last 3 years are 8% to 10% per annum. This is one of the best short term investment options to get high returns post tax. Some of the good debt mutual funds for short term are indicated here.
Also read: Best Long Term investments for 2013
2) Liquid Mutual fund: These mutual funds would invest in liquid investment options. As the name indicates such investments would have high liquidity. These are best suitable for investors who want high liquidity and want to park money for very short term.
3) Savings Bank account: Gone are the days where you need to park your short term money in bank FD. You can still keep your money in savings bank account and earn interest rates up to 7% per annum. Yes Bank offers 7% returns per annum for savings bank account above Rs 1 Lakh and 6% below Rs 1 lakh investments.
4) Bank fixed deposits: There are several small banks which are offering high interest rates for short term to medium term up to 10% per annum. If you are looking to invest in such small banks, try to invest up to Rs 1 lakh so that your money would be safe. Below are the top banks which are offering high interest rates up to 3 years period.
5) Ultra short term mutual funds: These mutual funds schemes invests majority of the investments in corporate fixed income securities and short term investments. Investor can invest in such ultra short term mutual funds for the period of 1 to 3 years period. The returns in the last 3 years are 8% to 9% per annum. These are one of the good short term investment options. Some of the best short term mutual funds are indicated below.
6) Fixed Maturity Plans (FMP): FMP mutual funds are close ended mutual funds which generally matures in 1 to 3 years period. FMP’s would provide indicative returns. The returns could vary and generally are in the range of 8% to 10% per annum. FMP’s are issued through NFO (New fund offer) almost every month. FMP Mutual funds are tax efficient comparing to bank FD's.
7) Corporate Deposits and NCD: Corporate deposits and Non convertible debentures offer high interest rates comparing to bank FD’s. Though there are several corporate FD’s, choosing highly rated corporate deposit would be a safe investment option. Some of the highly rated company FD's are indicated below
8) Gilt mutual funds (Short term): Gilt short term mutual funds invest in government securities for short term. These provide more or less safe returns of 8% to 12% per annum. Some of the best Gilt mutual funds are indicated below.
9) Post office term deposit: If you do not want to invest in stock market or stock market related instruments like mutual funds and are a low risk investor, you can invest in post office term deposits. The returns are between 8% to 8.5% per annum. This is one of the best short term investment options for those who do not want to take any risk.
Also read: How mutual fund returns are taxed?
10) Pre-launch properties: Thought I have not personally experimented this, but I could able to see several examples through my friends and colleagues. Whenever there is a pre-launch offer for residential property, my friend used to book a flat and within 1 to 2 years, he used to sell them at a premium of 20% to 30%. I felt this is a good strategy if one is looking for short term investment. Yes, I agree there is a risk that the real estate prices can fall. But this can be reviewed and considered by investors as one of the short term investment options.
Conclusion: All these 10 short term investments may not be suitable for everyone. They would depend upon the risk appetite and period of investment. Invest wisely and earn high returns on your short term investments.
Readers, what is your opinion about these best short term investment options? Do you think there are any other investment options which are good for short term?
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Suresh
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Hi Suresh,
With the current market downfall in India would you please recommend any Blue Chip or Mid-Cap, Small-Cap Stocks that should be considered good investment in long term? Thanks for all the information.
Vijay
Vijay, Stocks are high risk. The direction depends on several factors. However, I am recommending some stocks which would be analysed and posted next week. Please wait and watch.
Dear Suresh,
I really need your advise as my NRE RD is maturing in the next week. UBI has a scheme where the fund will be double in 7 years 7 months. Can you please if there is any other good scheme where I can invest fund. Any other way i can get the fund double before 7 years. I would really appreciate your kind advce.
Thanks & Regards,
Wincy
Wincy, Looks you have not looked at this article. Pls go thru this and provide further questions. https://myinvestmentideas.com/2012/11/10-best-ways-to-double-your-money-india/
Hi Suresh,
As usual informative post. 🙂 If I can bug you further, I'd like your opinion on 2 recent funds. First up, I'm not sure if they are Liquid MF's or Debt-based MF's. So it would be useful if you can clarify this also –
1. IDFC's Fixed Term Plan Series 30 http://www.idfcmf.com/uploads/idfc-ftp-series-30-form-kim.pdf
2. Sundaram Fixed Term Plan – DU http://www.sundarammutual.com/pdf2/2013/SID/SID_Sundaram_FTP_DU_366Days_Aug13.pdf
Both dont mention any tentative rate of return. I'm assuming it'll be around the 9-10% range. What is your take on these two?
Karthik, Here are my comments 1) IDFC FTP is fixed maturity plan and Matures on 3-Dec-2013. Very short term scheme. It is immaterial whether market is good or not, it would close on that date. The allocation is 70% in Corp deposits and 30% in NCD’s and others. The returns can vary between 8% to 11% per annum. 2) Sundaram FTP is also fixed maturity plan and matures within 366 days. The returns here too would be around 8% to 11%. These are not liquid investments as you cannot sell them like any other mutual funds. Instead invest in other debt funds and you would have optoin to retain for some more time in case of any flucuations in interest rates due to RBI policies
Hi suresh,
if i want to have life time montly income with single time deposit.
what is the best policy avilable (age 33)
Thanks
Raghu
Raghu, I don’t think any such insurance policy is available.
I am reliance mutual funds investor. I have invested in reliance regular savings. Now i want to invest in short term fund. please have a look http://www.reliancemutual.com/OurSchemes/schemeDetails.aspx?Id=201 Direct plan growth plan and guide me !
Umesh. This is reliance short term fund. Good fund.