BEST SHORT TERM INVESTMENTS

Investing is important!!!

Work hard to earn billions of dollars, later this money will work for you. If you’re not investing and just spending your money on unnecessary things, you’re truly wasting your time and money. Consider investing seriously, you can earn good returns that are generated from your investment. This will help you in emergency situations and provide standard financial stability after your retirement.

Hope you understand the importance of investing. If you’re new to the investing world, it’s good to start with small. Concentrating on short- term investment is worth it.

What is meant by short-term investment?

The short term investment is trending. People make short term investments because they require the amount at a specific period. Let’s consider, you might save money to buy a house or plan for a wedding. For these things you need money. These investments can be planned for less than two or three years.

You’ll sacrifice a potentially higher return for the safety of having the money.

Following are the best short term investments

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Saving account

Small and reputed banks often offer saving accounts to their customers to hold their money in the checking account. People often save their money in saving accounts and earn interest. Though the returns might be less, people prefer to keep their money in a savings account since the low risk is involved. It means people can deposit or withdraw amounts according to their requirement and necessity. When you save money on a savings account, the bank will pay interest either quarterly, half-yearly or annually. Investors can easily manage their saving account without hassle.

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Short term corporate bonds

A corporate bond is a debt that is issued by the organization or company for it to increase the capital. Simply put, investors buy a corporate bond by lending a certain amount of money to the organization and expect interest. These corporate bonds often provide higher interest rates and also carry higher credit risk. It means these bonds are risker than United States government bond. Therefore, corporate bond usually offers a high-interest rate to investors in order to compensate for high risk. The interest can be generated at regular intervals or twice a year.

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Liquid mutual funds

Is there anybody who is unaware of the benefits of mutual funds? Ofcourse nobody right. Liquid mutual funds are well known as debt-oriented schemes. An investor can choose liquid mutual fund as the short-term investment, these are involved low-risk returns. Also, investors can withdraw their funds whenever they require. They don’t need to bother about exit load. Also, liquid mutual funds offer easy entry and simple exit route. Keep a note, the returns are not fixed. The return varies according to market conditions. As per the analysis, investors can earn 6 to 7.5% return every year. If you’re looking for attractive returns, liquid mutual funds are the best option for you.

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Liquid funds

Liquid funds work almost similar to mutual funds. Investors can invest their money at financial institutions, government certificates and securities. You can withdraw their money from liquid funds according to their requirement. Unlike emergency funds, you cannot withdraw funds anytime. But you can get your money back within a couple of days. Liquid funds will provide high-interest rates i.e upto 7%. Since the funds in liquid funds are invested in “money market instrument”, the interest rate may vary.

Liquid funds offer you a higher interest rate of up to 7%. Since the money in these funds is invested in money market instruments, you can expect a comparatively higher amount of security for your investment.

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Recurring deposits

It is the best option for the one who is planning to invest an amount in small intervals. If you don’t want to invest huge amounts of money in one go, a recurring deposit is the best way for you. Start investing with little money, this type of loans offers flexibility for the investor to deposit the money according to their choice. You can create a recurring deposit account at the post office or financial institution. Investors can deposit their money for a minimum tenor of 6 months. Here the maximum tenor is 10 years, according to your requirement choose the tenor period. The interest earned through recurring loan is taxable.

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Bank fixed deposits

Looking for a safe and secure option to invest your money? Bank fixed deposits are the best choice for you. No matter whether you’re looking for short term or long term, you can get a good rate of interest through a fixed deposit. The tenure period may vary from one week to 10 years. According to the investment of the period, the interest rate will vary.

As per research, local and international banks are offering good interest rate on fixed deposits that are ranging from 4% to 8%. The percentage may depend upon the tenure. If you’re a senior citizen, you can get an extra 0.5% on your fixed deposits. Investors can withdraw their fixed deposits anytime, the interest that is earned through fixed deposits are taxable.

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Certificates of deposit (CDs)

A certificate that is issued by the bank to the investor for depositing their funds for a specified period at a specific interest rate. With the certificate of deposit, you can deposit money for a certain period of time and get a good rate of interest. Make sure to deposit in trusted banks to reduce the risk of fraud. When you opt for long term deposits, you can earn great returns. The tenure period may range from quarterly to 5 years.

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Conclusion

It’s always the right decision when you don’t compromise on safety. Investing your money when you’re at teens is the best way for you. The short term investment is the best choice for investors to invest their funds. No matter whether you’re planning to invest $10,000 or $100,000, there are multiple ways to invest your money with no risk. The best investment process are short-term corporate bonds, liquid funds, bank fixed deposits and certificates of deposit. Choose the best option that meets your needs.

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