Simple Short term investment ideas
Posted on: 28/Dec/2016 6:21:12 PM
What is a short term investment? The answer is simple. Any investment that is made between 1 and 5 years is called short term investment. They come with a number of advantages compared to long term ones. Here, the risk is lesser and the bank or financial institution does not keep the money locked up. At the same time, the return on investment is high too. Let us now take a look at some of the best short term investment plans to choose from.
Fixed Deposits
This is among the safest short term investment plans. It offers fixed rate of interest between the range 4 and 11 percent per annum. However, it is possible to withdraw the amount even before the maturity period. The term of deposit may vary between 10 days and 10 years. After 3 months of commencing the deposit, the interest will be paid. Under section 80C of Income Tax Act, 1961, these deposits are exempted from taxes. Please also note that premature withdrawals will be fined with penalty.
Savings in SB account
Funds need to be used for liquidity is one more reliable and safe way to make investment. About 4 to 7 percent interest is paid for saving with any bank or financial institution. This interest rate depends on the amount or duration of which you keep the funds in account.
Gold investment
This is among the wisest options to invest for a short time period. At times of uncertainty, the yellow metal can come to use, fetching quick money. During banking crisis, inflation or other emergency situations, gold comes helpful. At the same time, changes in trends in the financial market do not affect the metal’s value at any time. There is constant increase in demand for gold and hence 23.5 percent return on investment is seen in the past few years.
National Savings Certificate
The period of investment of National Savings Certificate is 5 years. As it is an effective investment scheme, the amount matured will be exempted from tax, according to Section 80C. However, interest obtained is applicable to tax.
