Investment has always been a smart move towards a secure future. A short-term investment is an investment where the plan has a time duration of at the most five years or less than that. Usually, investors search for a way to park their money for some time and use it in the near future. E.g., to buy a vehicle, to pay your child’s semester fees in 2 years, etc. are some of the cases where short-term investment plans work.
There are many plans for short-term investments. But have you ever thought what the best investment plan for a short term is? If you have not, then there are 3 best plans for a short-term investment:
- Saving accounts:
Saving accounts possess the best liquidity with more than 4% to 7% returns. It is considered as one of the easiest, simplest and best ways of investing money. Or we can say it is the easiest way to access your money, but there is no much of earning through saving accounts. - Liquid funds:
These funds are government certified and are a secured investment. You can start investing at any time and leave it whenever you want without any risk since these are secure. The banks provide around 4% to 7% returns. In this plan, the investment is usually done through money market investment where one calls money among others. This fund has duration of 90 days and even higher from day one. - Fixed Maturity Plans:
Fixed maturity plans come with a lock-in period of minimum 3 years. This plan acts precisely like banks FDs which are tax efficient and even provides better returns as compared to bank FDs.
It is mandatory to select the best investment plan as per your comfort. Doing a thorough research about the various investment plans in the market is essential in order to avoid making wrong choices. The primary objectives for short-term investments are to have safety on capital and return of capital. The plans mentioned above best provide these objectives.
