Top 10 Best Short Term Investment Options in India

Top and Best Short Term Investment Options and Plans in IndiaTop 10 Best Short Term Investment Options in India


There are various ways where you can invest your money in short term and long term. While long term investment options fetch you good returns, short term investment options can provide good returns along with liquidity. You can choose best short term investment options in India to invest your emergency money. You can invest in top investment plans in India for any pressing expenses that may arise in near term. In this article, we would analyse and provide top and best short term investment options and plans where you can invest and get good returns.

Top 10 Best Short Term Investment Options in India


1) Invest in Liquid mutual funds


Liquid mutual funds are those which can be liquidated within short term with almost zero risk. These funds would invest in short term government or corporate securities. While returns would be on lower side, you may expect 7% to 9% returns per annum. You can invest in top liquid funds like Tata money market mutual fund, Taurus liquid fund and Birla SL Cash plus etc., I feel liquid funds are one of the best short term investment options as they provide liquidity where you can redeem and get your money back in 3 working days.

2) Invest in top rated company fixed deposit schemes


There are various companies which are offering fixed deposits with attractive interest rates. The interest rates are ranging between 9% to 12.5%. You can choose a short term deposit ranging between 6 months to 3 years. You should invest in company FD schemes which have good credit rating. SRS Ltd FD scheme offers 12% and rated as FA-. DHFL FD scheme offers 9.6% and rated as CRISIL-AAA. Mahindra FD Scheme offers 9.25% and rated as CRISIL-FAAA. One should note that to liquidate such FD, it may take time between 15 days to 45 days.

3) Invest in range bound stocks


Another best short term plan is to invest in stocks which are range bound. Means these stock prices would be flucutating within this range and very hardly they break the upper level. One example is about Ashok Leyland where the stock prices fluctuates between Rs 81 to Rs 95. You can buy at Rs 81 and sell at 15% profits every time when it goes up. It may take time for you to identify such stocks, but that is not an impossible task.

4) Invest in Best Debt mutual funds


Investing in debt instruments provides good returns in short to medium term. These are good for the risk-averse investors and the options available in this avenue are plenty beginning with Debt Mutual Funds. You can look for Birla SL Short term fund, L&T Short term Deposit fund etc. in this category. I feel debt funds are one of the best short term investment plan as it provide good returns along with easy liquidity.

5) Short term bank Fixed Deposits


Bank FD schemes are offered by public sector, private sector banks and foreign banks operating from India. It is unbeatable in terms of liquidity and security. Ratnakar Bank is offering 8.25%, Bandhan Bank is offering 8.25%, IDFC Bank is offering 8% interest rates. Most of the other banks are offering 7.9% interest rates. I feel this is one of the best short term investment option as you can get your money back on same day if you wish to close the FD.

6) Short-term Floating Rate Funds


Like FD, these funds do not have fixed interest rates. They keep changing as there are fluctuations in the benchmark index rate, which explains that the rate of returns increases or decreases depending upon the benchmark index rates. There are good short term floating rate funds like SBI Savings Fund, L&T Floating rate fund which gave 8.7% returns in 1 years. You can redeem and get your funds back within 3 working days.

7) Non Convertible Debenturs (NCD)


There are several corporates which are issuing secured NCD’s where interest rates are ranging between 8% to 10%. You should wait and watch for these NCD’s to be issued and subscribe to them. One can subscribe to Secured NCD’s as they are safe investment options compared to unsecured NCD.

8) Recurring Deposits (RD)


If you want to save monthly you can invest in recurring deposits offered by banks. Banks are currently offering 7.5% to 8.5% interest rates. RD is one of the best short term investment option as they provide liquidity as well as safety.

9) Fixed maturity plans (FMPs)


FMPs are another option where investors can invest for a fixed term ranging between 2 to 4 years depending on the mutual fund scheme. The returns can be as good as 9.5%. The only drawback of FMPs is their illiquidity. They have a fixed term and hence you have to be invested in the fund for the fixed term to achieve good returns. FMPs are closed ended funds and their portfolio consists of Government securities and possibly high grade company bonds.

10) Savings account offered with high interest


Investing in a savings account is the safest option as it is less risky and has high liquidity too. The minimum amount required for this investment differs from one bank to another. While most banks offer 4% interest there are few banks like Yes Bank, Axis Bank etc., which offer upto 6% interest rates. You can check for those high interest paying banks, open SB account and retain your money without even moving them to fixed deposit scheme.

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