Not ready to invest for a long time. If you are looking for Best Short Term Investment Plan in India with High Returns then search no further. This blog post enlisted all the best short-term investment plans in India. Whether you are looking to park your money for a short period, want to pay monthly, invest for 7 days to 7-8 years and still earn decent returns, short-term investment plans are the way to go.
Here’s a simple guide to some of the best short-term investment options available in India.
Table of Contents
What are Short-Term Investments?
Short-term investments are financial investments for a very short period, i.e. investing for a few days to few years. The aim is generally high liquidity, low risk, easy to start and easy withdrawal procedure. Above all the procedure should not be time taking.
Best Short-term investments are preferred by investors who want to preserve capital or earn medium returns over a short time horizon. The ultimate need is the flexibility to access funds quickly.
Best Short-Term Investment Options in India
1. Fixed Deposits (FDs)
Fixed Deposits are the most loved investment option for Indians. Fixed Deposits are well known for their fixed return, super easy setup and easy withdrawals.
FD is a safe investment option for tenure ranging from 7 days to 10 years. FDs offer a fixed rate of interest, which is higher than a regular savings account. The returns are guaranteed, making it a risk-free investment.
- Tenure– 7 days to 10 years
- Interest Rate– 3% – 8.5% per annum (varies by bank)
- Risk-Very low
SBI Amrit Vrishti FD – Interest Upto 7.75%
2. Recurring Deposits (RD)
Another secure option is Recurring Deposits. RDs are perfect for those who want to save a fixed sum monthly. You can choose the tenure ranging from 1 year to 10 years. It’s an excellent way to build a corpus over time with guaranteed returns.
- Tenure- 6 months to 10 years
- Interest Rate- 3% – 8% per annum (varies by bank)
- Risk- Very low
SBI RD Interest Rate 2024- Recurring Deposit
Recurring Deposit Calculator- Features & Benefits
3. Liquid Mutual Funds
Liquid Mutual Funds are debt mutual fund that invests in short-term money market instruments. They offer better returns than savings accounts and provide high liquidity, allowing you to withdraw your money quickly without any exit load ( penalty).
- Tenure- A few days to 3 months or more
- Interest Rate- 3% – 7% per annum (varies by fund)
- Risk- low
4. Short-Term Debt Funds
Short-Term Debt Funds invest in debt securities with a short maturity period of 1 to 3 years. These funds provide better returns than liquid funds and are relatively less volatile as compared to equity funds.
- Tenure- 1 year to 3 months or more
- Interest Rate- 6% – 9% per annum (varies by fund)
- Risk- low to moderate
5. Treasury Bills (T-Bills)
Treasury Bills are government securities issued by RBI. T Bills are issued by GOI for short-term borrowing. They are available in three tenures: 91 days, 182 days, and 364 days. T-Bills are considered very safe as they are backed by the government.
- Tenure- 91 days, 182 days, 364 days
- Interest Rate- 3% – 6% per annum (varies )
- Risk- Very low
Govt. Bonds Online – RBI Retail Direct Scheme
6. Post Office Time Deposits
Post Office Time Deposits are Fixed Deposit with Post Office. They offer fixed returns and are backed by the government of India, ensuring safety and reliability.
- Tenure- 1 Year, 2 Year, 3 year & 5 Year
- Interest Rate- 5.5% – 6.7% per annum (varies by tenure)
- Risk- Very low
8. Corporate Deposits
Corporate Deposits are fixed deposits provided by companies or financial institutions. They usually have higher interest rates compared to bank FDs but come with a higher risk. It’s essential to choose reputable companies to minimize risk.
- Tenure- 1 Year -5 Year
- Interest Rate- 6% – 10% per annum (varies by tenure)
- Risk- Moderate to high
9. Post Office Mahila Saving Samman Yojana
Post Office Mahila Saving Samman Yojana is available for female investors. The maximum Deposit limit is Rs.2 lac.
- Tenure- 2 years
- Interest Rate- 7.7%per annum
- Risk- Low
Post Office Saving Scheme- Unlocking The Benefits
10. Arbitrage Fund
Arbitrage Funds are a mutual fund category that takes advantage of price differences between different markets. In other words, these funds generate riskless profit.
Above all Arbitrage Funds bear Equity taxation which means a lower tax rate. High-income people can take advantage of these funds and invest for 1-3 years.
- Tenure- 1-5 years
- Interest Rate- 7.7%per annum ( Vary from fund to fund)
- Risk- Low
11. Fixed Maturity Plans
The Fixed maturity plans from mutual fund houses are the close-ended funds. These funds have a fixed investment duration that typically ranges from 2-3 years.
- Tenure- 1-3 years
- Interest Rate- 7-10% per annum
- Risk- Low to moderate
12. National Saving Certificate
National Saving Certificate is a 5-year deposit scheme. Govt of India backs the NSC. Just deposit one time money and enjoy the benefits.
- Tenure- 5 years
- Interest Rate- 7.7%per annum
- Risk- Low
What Is National Saving Certificate- Best One Time Deposit Scheme
13. Equity Savings Mutual Funds
Equity Savings Mutual Funds are combination ( hybrid ) mutual fund and thus have lower risk than equity Mutual Funds. These funds combine Equity and equity-related instruments (min.65%), debt instruments (min.10%) and derivatives.
- Tenure- 3-5 years
- Interest Rate- 6%-9% per annum
- Risk- Low to moderate
14. Conservative Hybrid Fund
These funds are debt-oriented hybrid funds. They are also a type of hybrid mutual fund. These funds invest in equity & equity-related instruments 10% to 25% investment and 75% to 90% in Debt instruments.
- Tenure- 3-5 years
- Interest Rate- 6%-9% per annum
- Risk- Low to moderate
15. Dynamic Asset Allocation or Balanced Advantage Fund
As the name suggests Dynamic Asset Allocation funds are hybrid funds. The fund’s asset allocation is managed at the fund manager’s discretion. Fund Invest in equity/ debt and are managed dynamically.
- Tenure- 3-7 years
- Interest Rate- 6%-10% per annum
- Risk- Low to moderate
16. Multi Asset Allocation Fund
These funds Invest in at least 3 asset classes with a minimum allocation of at least 10% in each asset class. Due to diversification within the fund, they perform better.
- Tenure- 3-7 years
- Interest Rate- 6%-10% per annum
- Risk- Low to moderate
Conclusion
Choosing the best short-term investment plan India depends on your financial goals, risk appetite, and liquidity. Fixed deposits and recurring deposits are ideal for risk-averse investors, while liquid mutual funds and short-term debt funds can offer better returns for those willing to take a slight risk. Treasury bills and post office time deposits provide a safe investment avenue backed by the government.
