Short Term Investments In India

Protect Your Capital With Less Risky And More Liquid Short-Term Investments In India

Money is essential in every aspect of our lives. Every day, we get up to do our jobs to be paid. But are we investing our hard-earned money in the right places, where it will yield good returns and help us achieve our short-term objectives? 
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If not, it is time to consider short-term investments.

Once you’ve determined that your plan and goals require short-term investments, there may be additional factors to consider in terms of implementation, depending on what type of investment you will make. 

A financial advisor like those we have here at Pearl Lemon Invest can assist you in developing a plan that aligns with your short-term objectives while taking a broader view of your overall investment strategy.

Book a call today to learn more about how we can help.

Short Term Vs Long Term Investments

Setting up an investment portfolio necessitates clarifying your goals, risk tolerance, and preferences. You must also be aware of your time horizon. Are you looking for quick money, or are you in it for the long haul? 

This will influence whether your portfolio is geared toward short-term, long-term investment, or a combination of the two. Knowing the difference between short-term and long-term investments will help ensure that your investment portfolio is tailored to your specific goals.

So what is better?

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If you want lesser risk, then short-term investments are best for you. Short-term investments are less risky, making them more stable options. In case of market volatility, a short-term investment can help diversify income types.

Short-term investments are investments that typically last less than a year. Stocks, bonds, commodities, and currencies can all be used to make these investments. The main distinction between short-term and long-term investments is the time they will be held. These investments are typically made to earn a higher return than other investments.

Moreover, because they are bought and sold in large amounts quickly by many investors, short-term investments can earn higher interest rates than other types of investments. Because they are liquid, they do not require as much paperwork or documentation as long-term investments.

The Best Short-Term Investments In India

Short-term investment plans are created to help us achieve our short-term objectives. Let’s look at the best short investment plans and how they fit into your investment strategy, goals, and financial risk profile.

Here are some of your investment options for short-term savings plans

Savings Account

It is critical to save money. It allows you to build financial security, feel confident, and plan for the future. A savings account is a type of bank account in which you can earn interest on your money. There are various savings accounts, but they all have one thing in common: you deposit money into them and earn interest on them until you withdraw it. 

Many people prefer to keep their money in a savings account because it is the most secure way to keep it safe and earn decent interest. Savings account interest rates vary because the institution determines them. Banks offer savings accounts with returns of up to 7%.

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Debt Mutual Fund

These mutual funds invest primarily in debt instruments such as government bonds, treasury bills, commercial papers, corporate bonds, and other money market products. This is the best short-term investment option for risk-averse investors seeking higher short-term returns.

Recurring Deposits

A fixed deposit is a one-time investment of money in the form of a lump sum. However, you most likely earn money regularly. There is also no opportunity for regular investing. What if you want to invest a set amount of money every month?

A short-term savings plan that allows you to do this is recurring deposits. You can set up a recurring deposit at your bank or a nearby financial institution (NBFC). The post office’s recurring deposit scheme is also popular. You have the option of a six-month to a ten-year contract.

Recurring deposits can provide all of the advantages of fixed deposits, such as safety and ease of investing, as well as the benefit of regular investing.

Liquid Funds

Liquid funds are debt funds that invest in money market instruments that generate short-term fixed interest. Treasury bills, commercial paper, and other underlying securities are examples of underlying securities in a liquid fund’s portfolio.

Liquid funds are designed for people with a lot of spare cash looking for safe havens. Rather than putting your excess funds in a savings account, you can invest them in a liquid fund and earn much higher returns. Some examples of surplus money include performance-based incentives, bonuses, and other relevant gains realised from selling capital assets. Liquid funds can be used to invest in equity mutual funds.

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Stock Market

Stock markets are the best short-term investments for high-risk takers to invest in and earn maximum returns. If you can identify the right stocks, invest in them for a few months to double your money. You could lose your entire investment if you bet on the wrong stocks.

Fixed Maturity Plans

Fixed maturity plans range in length from one to five years. They invest in bonds with a residual maturity that corresponds precisely to the duration of the FMP. Remember that FMPs are closed-ended plans; the only way out may be to sell them on the secondary market at a loss. FMPs are a valuable tool to add to your return quotient if you have a one-year holding period.

ETFs For Gold

An Exchange Traded Fund (ETF) value is linked to the value of the asset it tracks. The gold ETF’s value is linked to the price of gold. These funds may outperform during times of market volatility and geopolitical unrest. Because they are traded on exchanges, they are highly liquid and can be liquidated in a matter of days.

Ensure Your Strategy Aligns With Your Short Term Investment Goals

Nobody has the time or inclination to become an investment expert. Still, aligning your strategy with your short-term investment goals is more important nowadays.

But don’t worry. If you’d rather have a simple investment plan that you can follow without constantly worrying about changes in legislation and the economy, or financial products, consider hiring a trusted financial advisor like Pearl Lemon Invest.

Our experts can help you with everything from choosing the best and most timely way of short-term investment to a good strategy that can help you maximise your investment returns.

Give us a call today to learn more!

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FAQS

The best investment plan for the short term must align with your risk profile and goals. Liquid funds, recurring deposits, debt mutual funds, and ETFs are all popular short-term investment options.

The stock market provides the highest returns, ranging from 10% to 100%. So all you have to do is identify the right stocks, and you’ll have doubled your investment in months. You can also invest in Debt Mutual Funds, which provide returns ranging from 8% to 11% over 6 months to 3 years.

Short-term investment plans are considered liquid assets. They are specifically designed to temporarily save your money so you can withdraw it when needed while also earning returns.