Don’t want to keep your capital parked for a long time? Are you interested in investing in something worthwhile that will generate good returns within three to twelve months? It is time that you should explore short-term investment options.
Short-term investment options represent marketable securities that can generate a handsome amount of returns for you within one to five years maximum. Yes, these are secure and liquid assets meant for people who want to keep their surplus amount safely for a short tenure and panic less regarding the security of their funds. Some options that you can try your hands on are savings accounts with an impressive interest rate, fixed deposits, large-cap mutual funds, and more. You can look at any short-term FD investment scheme that can assuredly provide a handsome return within the shorter lock-in period. The tenure of these Fixed Deposits can vary from 7 days to two years.
For the smooth growth of your money in a safe and secure environment, you should go through some of the wisest short-term investment options for the fiscal year 2021.
- Savings Account – In India, people blindly depend on their savings accounts, and it is indeed an impressive option for short-term investment with complete liquidity. For a trouble-free fund withdrawal anytime, anywhere, you can depend on a savings account. However, the demerit of using a savings account as a short-term investment option is the low interest rates. In India, the interest rate of a savings account is approximately 3.5 – 4%. Hence, it is not a very suitable option if you are looking to let your corpus grow. However, check the short-term FD investment scheme to get equitably impressive returns on your excess amount.
- Fixed deposits – You are right now reading about the safest short-term investment option. Use the bajaj finance FD calculator to calculate the amount of return you will gain on your surplus amount for the specific tenure. The bright side of having money parked in an FD investment scheme is that it will yield a high return, it is devoid of market volatility, it safely handles reinvestment and more. The tenure of the FD investment scheme is varied, having interest rates ranging between 5 to 8.5% approximately. The best part is, the interest rates of the FD investment scheme remain unchanged even when the market witnesses severe fluctuations. However, one of the downsides is that if you opt for an FD investment scheme, chances are you will not receive any tax deduction. Plus, you might face the brunt of high-income tax rates that go up to 30%, depending on your IT slab. An FD investment scheme is rewarding and safe overall. You can use the bajaj finance FD calculator at any given point in time to check the amount of growth you can expect on your principal amount.
- Large Cap mutual funds – These are safe but not entirely devoid of market fluctuations. You are investing your principal amount in selected equity shares of businesses having large market capitalization. You can expect significant growth in a short period. Invest for 1 to 3 years and see your investment turn out to be fruitful. You can calculate the approximate yield depending on the expected rate by using the bajaj finance FD calculator.
To conclude, it is safe to say that investing in an FD investment scheme is a pretty decent idea because the rate of interest is satisfactory, and the risk is low. An FD investment scheme is immune to market fluctuations, whereas large-cap mutual funds are in tune with market volatility. Savings account yields are meagre compared to an FD investment scheme as the interest rates are considerably lower. Ideally, the risk and return are optimal in an FD investment scheme, so you may check with the different available options in the market to choose the one that suits you.
Gaurav Khanna is an experienced financial advisor, digital marketer, and writer who is well known for his ability to predict market trends. Check out his blog at Highlight Story.