What is the best short term investment in India
Monday, Jun 20, 2022
In India, investment has become a huge part of everyone’s earnings and people have started to earmark their share of salary which they would want to invest. The investment instruments available are large in number and it usually depends on the investment horizon of the individual. Let us talk about the various short term investments available to Indian investors.
Savings Account
Savings accounts are one of the popular short-term investment schemes in India. You can save extra cash and earn interest in your bank or financial institution's savings account. Users can withdraw their investment at any time, providing maximum liquidity. In addition, there is no limit to the amount of deposits, and some banks have zero balance accounts.
Recurring Deposits (RD)
This is the most common short-term investment option used by many to securely deposit funds for the short-term needs offered by all banks. It allows you to earn a fixed interest rate on your investment until maturity.
Fixed Deposits (FD)
Deposits (FDs) are another common way to build a corpus of short-term investments offered by banks. This amount is invested at a constant rate of return for a specified period of 7 to 10 years. After that, it will automatically expire and you can withdraw. Interest rates are higher than savings and RD, but there are no early withdrawal options.
SIP in Equity Mutual Funds
Equity fund SIP Systematic investment plans (SIPs) are most effective in the long run, but you can also use them in a shorter time frame to generate decent profits. If you are considering an investment period of up to one year, we recommend starting SIP with a trust with a high market capitalization. This is to invest in large companies that can grow faster in the market.
With so many instruments available, people have started availing services of portfolio management services that are able to allocate the investible amount across different products including equity and debt to avail the best possible risk adjusted return.
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