5 Short-Term Investment Options To Invest in 2024

Our parents instilled in us the values of saving and investing since childhood. Don’t you agree? A good investment can help you grow your money. In this article, we’ll walk you through the best five short-term investment plans. 

Short-term investments are financial assets that you can convert into cash within a short span of time. Generally, these investments come with a maturity period of five years. You can invest in these investment plans to satisfy your short-term financial goals. There are many short-term investment plans available for investors. So, it is common to ask yourself, “What are the best short-term investment options?” While you were thinking, we’ve enumerated a list of the top 5 short-term investment plans to invest in 2024. Continue reading to find out! 

5 Short-Term Investment Plans 2024

The table below highlights the best short-term investment plans to invest in 2024. 

Recurring deposits

The following are the key points to know about recurring deposits: 

1. You can open an RD account for 6 months and increase tenure in the multiple of 3 months upto 10 years. 
2. The minimum lock-in period is one month. In case of premature withdrawal of the funds, the depositor will only receive the principal amount. No interest will be paid. 
3. The interest rate for recurring deposits is the same as bank fixed deposits. If you invest in an RD account for a tenure of 12 months, the interest rate applicable will be 6.5% per annum. 
4. The interest earned from recurring deposits is taxable as per the Income Tax slab rate. In the case of short-term investments, TDS is deducted if the interest earned is higher than Rs. 10,000. 

Fixed Deposits 

The following are the key points to know about fixed deposits: 

1. You can invest in fixed deposits for a tenure of 1- 10 years as per your financial goals. You can reinvest the amount on the maturity of the FD. 
2. Fixed deposits provide high liquidity to investors. This means that you can partially withdraw your funds without any hassle. 
3. Fixed deposits provide a fixed interest rate of 8-9% per annum on investment of up to 1 year. The market volatility does not have any impact on the FD interest rate. 
4. Fixed deposits are taxable instruments. Thus, an investor may have to pay a tax on interest earned from FD. 

Large-cap mutual funds

The following are the key points to know about large-cap mutual funds: 

1. It is a short-term investment plan with a tenure of 3-5 years.  
2. It provides high liquidity and a high-interest rate of 8%- 13% to investors. 
3. Large-cap mutual funds are low-risk investment plans. 
4. Large-cap mutual funds are taxable. The capital gain tax is applicable on both short-term and long-term debt funds. 

Corporate Deposits

The following are the key points to know about corporate fixed deposits: 

1. They provide greater returns than bank fixed deposits.
2. You can choose between different policy tenures such as monthly, quarterly, semi-annually, or annually.  
3. You can choose a secured non-convertible debenture to reserve your fund in corporate deposits. 
4. Corporate fixed deposits are low-risk short-term investment options. 

Debt instruments

The following are the key points to know about debt instruments: 

1. You can invest in debt instruments for a tenure of 91 days upto 12 years. 
2. These instruments provide high-interest rates in comparison to savings accounts. Moreover, there is high liquidity of funds. 
3. It is one of the best short-term investment plans as it provides regular and high returns to investors. 

Wrap Up 

In conclusion, short-term investments are great ways to create wealth and inculcate a savings habit among ourselves. When choosing the right investment plan, make sure that you analyze your financial goals carefully. After analyzing your financial objectives, choose the plan that best suits your needs.

Also read: Income Tax Filing For Freelancers