If you are looking for ways to invest your money for a short period of time, you may be overwhelmed by the number of options available in the market. Short term investments are those that typically last for less than a year and offer higher returns than traditional savings accounts. However, they also come with higher risks and volatility, so you need to be careful while choosing them.
In this blog post, we will discuss some of the best short term investments plans that you can consider in today’s market, based on your risk appetite, liquidity needs and financial goals. If you are not confident about the current market, you can take the help professional help from investment portfolio management services.
Debt Mutual Funds for Short Term Investments
Debt mutual funds are a type of mutual funds that invest mainly in debt and money market securities, such as corporate bonds, government securities, treasury bills, commercial paper and certificates of deposit. They aim to provide regular income and capital preservation to investors.
Debt mutual funds are suitable for short term investments that want to earn higher returns than fixed deposits or savings accounts, without taking too much risk. They also offer tax benefits under section 80C of the Income Tax Act, if held for more than three years.
The returns from debt mutual funds depend on the interest rate movements in the market, the credit quality of the underlying securities and the fund manager’s strategy. Generally, debt mutual funds can offer returns ranging from 5% to 9% per annum, depending on the duration and risk profile of the fund.
Some of the best debt mutual funds to invest in 2023 are:
- ICICI Prudential Short Term Fund
- HDFC Corporate Bond Fund
- SBI Magnum Low Duration Fund
- Axis Banking & PSU Debt Fund
- Kotak Savings Fund
Large Cap Mutual Funds for Short Term Investments
Large cap mutual funds are a type of equity mutual funds that invest predominantly in the shares of large companies with high market capitalization. These companies are usually well-established, stable and profitable, and have a strong track record of performance and growth.
Large cap mutual funds are ideal for short term investors who want to participate in the stock market, but with lower risk and volatility than mid cap or small cap funds. They also offer the potential for capital appreciation and dividend income.
The returns from large cap mutual funds depend on the performance of the underlying companies, the market conditions and the fund manager’s skill. Generally, large cap mutual funds can offer returns ranging from 10% to 15% per annum, depending on the fund’s portfolio and strategy.
Some of the best large cap mutual funds to invest in 2023 are:
- Mirae Asset Large Cap Fund
- Axis Bluechip Fund
- Canara Robeco Bluechip Equity Fund
- Nippon India Large Cap Fund
- Motilal Oswal Focused 25 Fund
Recurring Deposits for Short Term Investments
Recurring deposits are a type of term deposits that allow you to deposit a fixed amount of money every month for a predetermined period of time, and earn interest on it. They are offered by banks and post offices, and are one of the simplest and safest ways to save money.
Recurring deposits are suitable for short term investors who want to accumulate a lump sum amount for a specific goal, such as buying a car or going on a vacation. They also help inculcate a habit of regular saving and discipline.
The returns from recurring deposits depend on the interest rate offered by the bank or post office, which may vary from time to time. Generally, recurring deposits can offer returns ranging from 5% to 7% per annum, depending on the tenure and amount of deposit.
Some of the best recurring deposits to invest in 2023 are:
- SBI Recurring Deposit
- HDFC Bank Recurring Deposit
- ICICI Bank Recurring Deposit
- Post Office Recurring Deposit
- Axis Bank Recurring Deposit
Bank Fixed Deposits
Bank fixed deposits are a type of term deposits that allow you to deposit a lump sum amount of money for a fixed period of time, and earn interest on it. They are offered by banks and are one of the most popular and widely used forms of saving and investing.
Bank fixed deposits are suitable for short term investors who want to earn guaranteed returns with minimal risk and hassle. They also offer liquidity and flexibility, as you can choose the tenure and frequency of interest payout as per your convenience.
The returns from bank fixed deposits depend on the interest rate offered by the bank, which may vary from bank to bank and from time to time. Generally, bank fixed deposits can offer returns ranging from 4% to 6.5% per annum, depending on the tenure and amount of deposit.
Some of the best bank fixed deposits to invest in 2023 are:
- Bajaj Finance Ltd. (NBFC): This non-banking financial company offers attractive interest rates up to 8.2% for senior citizens and 7.95% for regular customers. It also has a CRISIL FAAA (Stable) & ICRA MAAA (Stable) rating, which indicates high safety and reliability.
- IndusInd Bank: This private sector bank offers 7.5% interest rate for senior citizens and 7% for regular customers. It also has a range of interest payout options such as monthly, quarterly, half-yearly, annual or at maturity.
- Yes Bank: This private sector bank offers 7.75% interest rate for senior citizens and 7% for regular customers. It also has a flexible tenure ranging from 7 days to 10 years.
- Unity Small Finance Bank: This small finance bank offers the highest interest rate of 9% for both senior citizens and regular customers. It also has a minimum deposit amount of Rs.1,000 and a maximum deposit amount of Rs.2 crore.
- Suryoday Small Finance Bank: This small finance bank offers 8.51% interest rate for senior citizens and 8.25% for regular customers. It also has a minimum deposit amount of Rs.1,000 and a maximum deposit amount of Rs.1 crore.
In conclusion, there are many short term investments plans available in today’s market that can help you achieve your financial goals. Some of the most popular options are fixed deposits, liquid funds, short term debt funds, arbitrage funds and equity savings funds. These plans offer different levels of risk, return and liquidity, so you should choose the one that suits your risk appetite and time horizon.
Always do your research before investing and consult a financial advisor if needed.
