When it comes to short-term savings options in India, there are several options you can explore. We want to discuss several short-term investment options in the bank. Before selecting any fund, please decide your financial goal, Your needs, and your family’s needs first. All options have their benefits. Please go through the below short-term investment options.
1.Savings Bank Account:
A normal way of saving your money in the bank is in your savings account. Where the risk is zero and your money is safe. You are also eligible to get interest on your savings from the bank’s end. It’s a liquid investment that provides a normal return. Interest rate normally varies from 3% to 6%.
2. Fixed Deposits (FD):
You can also deposit your money in a fixed deposit account where you are eligible to get interest varies from 6% to 9% depending on Bank to bank. The deposit period varies from 7 days to 10 years. You can close your fixed deposit at any moment through your mobile banking or net banking at your end only. Here the interest rate is more than the savings account.
3. Mutual Funds:
You can also choose mutual funds to invest for the short term to meet your short-term goal. But remember you should always choose open-ended funds which you can redeem at any moment. Here the interest rate is better than a savings account and fixed deposit based on the tenure. Generally, the tenure varies from 1 year to a maximum no limit. You can redeem your open-ended Lump Sum mutual fund at any moment and it will take T+2 days to credit to your account. It has a moderate risk in comparison to a fixed deposit.
4. Systematic Investment Plan(SIP):
You can also choose SIP to invest regularly with a minimum investment amount of Rs 500. You can open SIP for a minimum of 1 year and the return is far better than a Fixed deposit.SIPs offer better returns than savings accounts and are easily redeemable.
5. Recurring Deposit (RD):
You can also choose RD to invest in a recurring mode which will be linked to your savings account. It is similar to a Fixed deposit but you can invest in a monthly regular mode. The interest rate varies from 5% to 8 % depending on bank to bank.
6. Equity Linked Savings Scheme (ELSS):
You can also choose equity-based funds to invest for at least 3 years. Investment in ELSS funds provides tax benefits under section 80C. The return will be higher than the schemes mentioned earlier.
7. ULIP (Unit Linked Insurance Plan):
You can also go for investment plans that provide good returns. The tenure of the deposit is a minimum 5 years,depending on plan to plan.ULIP plans offer both investment and insurance facilities to the customer. You can also apply to redeem the ULIPS after 5 years; the return may go up between 15% to 40%.
