What Is The Ideal Three-year Investment Plan?

Nobody can predict the future, but we can certainly be prepared to tackle it by planning our finances and saving on the right investment options in India. The COVID-19 pandemic has taught the valuable lesson of savings, as it can only help us overcome the uncertainty of life.

What Are Short-term Investment Plans?

Investment options in India can be classified as short-term and long-term. Short-term investments can be made for shorter tenors of a year or two. It could be used to buy jewelry or a bike/ car or laptop or plan your holiday or anything that you might require soon. There are several lucrative 1-year investment plans that can help you make some quick returns. If you are investing for more than 5 years, it can be classified as long-term investments. It also means that you won’t be requiring those funds until the need arises. You could also consider re-investing your short-term investment gains, which can help contribute to your future.

Best Short Term Investment Plans with High Returns in India 

Let’s have a look at the 09 best short-term investment options in India that provide you higher returns on their investments to achieve your short-term goals as mentioned below:-

1. Recurring Deposits (RD)

This is the most common short-term investment option used by many to park their money for short-term needs, securely as they are offered in all banks. It allows you to earn fixed interest on the amount invested till maturity. You can open a recurring deposit (RD) account just by logging into your net banking account. Please choose the amount to save every month, specify the tenure, and it is done!

2. Fixed Deposits (FD)

Fixed Deposits (FD) is another popular way of creating a corpus for short-term investments offered by banks. The amount is invested for a specific period ranging from 7 to 10 years for a fixed rate of return, after which it automatically matures, allowing for withdrawal. Although the interest rates are higher than savings accounts and RD, there is no possibility of early withdrawal.

3. Corporate Deposits (CD)

Just like bank fixed deposits but the only difference is these deposits are collected by corporates for expansion and operations. The interest rates are slightly higher than the bank FD’s as the risk of default is higher. Those who have a risk appetite can invest in these corporate FD’s and earn better returns compared to bank FD.

4. Debt Mutual Funds

These mutual funds primarily invest the money in debt instruments such as government bonds, treasury bills, commercial papers, corporate bonds & similar to other money market products. This is one of the best short-term investment options for people who are risk-averse and looking for better short-term returns.

5. SIP in Equity Mutual Funds

Systematic Investment Plans (SIP) work best in the long-term perspective, but one can make use of them for shorter durations as well, to get decent returns too. If you are looking at an investment period of up to 1 year, it is suggested to start a SIP in large-cap mutual funds since they invest in large companies, which can rise faster in the market.

Conclusion

Short-term investments are the best option to accomplish your short-term financial goals. With short-term investments, you can ensure financial freedom that will help manage unexpected expenses. In addition, it offers you the flexibility to withdraw money whenever required without waiting for a long time.

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