The Best Short-Term Investments

  • Lates_blog
  • 14 Sep 18
  • Investor

Short-term investments are ideal for anybody looking to grow their money in a short span of time, but with a myriad of options available in the market, which one do you choose? Finding the right ones and intelligently allocating your funds will help you in the long term. Here are the best short-term investments you can use.

Timeframes are of primary importance for any investment to meaningfully assist your financial goals. The growth you expect needs tangible monetary reinforcements at the right time. In this context, short term investments, with a duration of fewer than 5 years can be critical for your financial planning. Successful long term plans are often complemented by well-executed short term investments. These small packets of monetary success that you doggedly pursue can obviously have big impacts on your personal finances. These are the index points that make up the overall flavour of your profit accumulation. Let us take a look at some of the short term investments that can have a big impact.

Liquid Funds

Liquid funds are low-risk investments that always manages to maintain their Net Asset Value (NAV). This makes liquid funds a relatively safe alternative in an increasingly risky investment space that sometimes seem dire. This is because liquid funds deal in short term securities offered by the government, this in turn, makes the stability factor very high in this type of investment scheme. Although, contrary to its name, liquid funds are not as liquid as traditional bank deposits. The returns are modest but the biggest highlight is that these mutual funds are extremely tax efficient. The main of utilising liquid funds should be to have access to short term income solutions that are low return investment as much as they are low risk.

Savings Account

The point of having a savings account is to have access to liquid cash at all times. Banks offer differing interest rates for the amount you have deposited which varies from 4 to 7 percent. Certain banks even offer free accident cover to new customers as they open a savings account. This is one of the most reliable ways to invest your funds in a safe manner.

Short Term Funds

Short term funds have a focus on investment protection with a really flexible tenure rate. They provide an investor with appreciable rates of interest. The point of interest as far as short term funds are concerned would be that the best duration for these would range in months. The applicability of short term funds will also have the added incentive of putting your investment under a very modest tax bracket.

Treasury Bills

RBI (Reserve Bank of India) institutes auctions for the purpose of selling treasury bills to the general public on a monthly basis. These are very low-risk investments as the bills themselves are supplied by the Central Government. Treasury bills are issued with a discount on actual value and after a maturity period which can range from 91 to 364 days, the actual value of the treasury bill is released in favour of the investor. The interest rate on these bills, however, is determined by market forces. Treasury bills are a huge part of the bill market in India that propagate lucrative trading practices.

Invoice Discounting

Invoice Discounting practices have been transforming the way small scale enterprises function for a long time now. This service helps assist the financial needs of these organisation without the use of interest or credit accumulation mechanisms that could potentially land their businesses at risk. What is often forgotten in this context, is the fact that Invoice Discounting is a spectacular investment opportunity that can lead to tangible gains for a prospecting investor. This is because, the invoices which are raised against prominent blue chip companies offer a very safe avenue for capital accumulation with minimal risks.

KredX offers a quite novel solution for the confused investor who is looking to maximise his profits while functioning under the lowest bracket of market risk. As a short term investment, Invoice Discounting is an important money mechanism that provides significant monetary appreciation in short timeframes.