Top Short-term Investment Plan With High Returns in India

In today's rapidly changing financial landscape, it's essential to identify the best investment opportunities that align with your goals and risk tolerance. As we delve into the realm of short-term investment plans with high returns, we aim to provide you with a comprehensive understanding of the best short-term investment plan with high returns perfectly suited for your investment journey. Our meticulous exploration will guide you through a range of possibilities, ensuring you gain valuable insights into potential avenues for maximising your returns in the short term.

Understanding Short-term Investment Plans

Before diving into the details of each plan, let's first define what we mean by 'short-term investment plan with high returns'. A short-term investment, often referred to as marketable security, is a financial strategy designed to provide high returns over a period, typically less than a year. These investments can offer attractive yield prospects for those seeking quick and profitable financial growth.

The following are the 10 best investment plans with high returns for the short term worth considering.

Liquid Mutual Funds: In the realm of mutual funds, liquid funds stand out for their high liquidity and low risk. Investors seeking quick access to their funds while enjoying modest returns from 4% to 7% might find these appealing. Although the returns can fluctuate due to interest rates and credit risk of the underlying instruments, the easy withdrawal policy adds to their allure. These funds can be an ideal choice for parking surplus funds over a short duration.

Fixed Deposits: Fixed deposits (FDs) in India are a popular and traditional investment option offered by banks and financial institutions. They are considered one of the safest and most secure ways to invest money for a fixed period, providing assured returns at a predetermined interest rate. With returns ranging from 5% to 7.5%, they are a good option for conservative investors. Even though they come with a defined maturity period and penalties for premature withdrawal, the stability they offer makes them a popular choice among Indian investors.

Arbitrage Funds: These funds exploit the price difference in the cash and derivatives market to generate returns. While the returns vary based on the market conditions, they typically hover between 4% and 6%. These funds offer an interesting combination of potentially high returns and relatively lower risk than pure equity funds, making them attractive for risk-averse, short-term investors.

Short-term Debt Funds: Offering a blend of debt and money market instruments, these funds aim for stable returns over a short-term horizon. Although they carry certain risks such as interest rate fluctuations and credit risk, the returns are generally better than FDs, usually ranging from around 7% to 9%. The high liquidity of these funds makes them suitable for conservative investors looking for short to medium-term investment options.

Post-Office Time Deposits: Post-office time deposits, offered by India Post, are among the safest short-term investment plans, guaranteeing assured returns. Popular in rural and remote areas, investors can choose flexible tenures of 1, 2, 3 or 5 years. The interest is calculated annually, with premature withdrawal restricted before 6 months. Attractive interest rates range from around 5.5% for 1-year accounts to 6.7% for 5-year accounts.

Gold or Silver Investments: Precious metals such as gold and silver have long been considered secure investment avenues by Indians. The returns are subject to market conditions and can vary widely. However, these precious metals are valued for their cultural significance, ability to hedge against inflation, and convenient liquidity, making them trustworthy options for short-term investments, particularly during times of economic uncertainty.

Corporate Fixed Deposits: Similar to bank FDs, corporate FDs offer fixed returns, often at higher rates ranging between 7% and 9%. While they present a promising opportunity for better returns, it is essential to note that corporate FDs carry more risk as they are not insured. However, for investors who are willing to take on a bit more risk for better returns, these investments can be an attractive option to consider.

Savings Bonds: Issued by the government, these bonds are a safe bet for conservative investors. The returns usually lie between 3% and 6%. They may not be highly liquid, as cashing them in before 5 years comes with a penalty, but the low risk and steady returns make them a suitable option for short-term investment.

Government Bonds: This financial instrument typically provides better returns than savings accounts, with interest rates typically ranging between 3.5% and 6.5%. They are an ideal choice for those looking for the safety of principal, competitive interest rates and easy access to their funds. Government bonds are a reliable avenue to grow wealth while maintaining a level of security and liquidity that appeals to a broad spectrum of investors.

Certificate of Deposits (CDs): Similar to FDs, CDs provide higher returns than regular savings accounts, usually between 6% and 7.5%. They come with a specific maturity date and premature withdrawal may lead to a penalty. Nonetheless, they remain a low-risk short-term investment for conservative investors.

Short-Term Investment Plans for 1 Month

If you're looking to invest for just one month, you can consider these options:

1. Savings account

2. Liquid funds

Short-Term Investment Plans for 3 Months

For a three-month investment horizon, you might explore:

1. Recurring deposit 

2. Bank fixed deposits 

3. Treasury securities

4. Money market account

5. Stock market/Derivatives

Short-Term Investment Plans for 6 Months

For a six-month investment period, consider:

1. Large-cap mutual funds

2. Post-office time deposits

3. Debt instrument

4. Gold or silver

5. Investments in NCDs/corporate or company deposits

Conclusion

In today's fast-paced financial world, investors are searching for the best short-term policy with high returns, aiming to seize quick opportunities. Understanding and choosing the right short-term investment plan with high returns can set you on the path to financial prosperity. It is crucial to keep in mind that each plan comes with its unique advantages and risks; therefore, it is best to diversify your portfolio across multiple investment plans.

For seasoned guidance on navigating the investment landscape, consider reaching out to Tata Capital. With a comprehensive range of investment services designed to help you make the most of your financial decisions, Tata Capital is well-equipped to help you secure your financial future with carefully crafted investment strategies.

Harnessing the potential of short-term investment plans can be a game-changer in your financial growth. All you need is a little knowledge, the right guidance and the enthusiasm to take the plunge. Happy investing!

FAQ's on short term Investment Plans

Which investment gives the highest return in the short term?

Equity mutual funds and large-cap mutual funds typically offer the highest returns for short-term investments. However, these come with higher risks compared to other investment options.

Which fund is best for the short term?

Liquid funds invest in short-term money market instruments that have maturities of up to 91 days. They typically invest in low-risk and highly liquid instruments like treasury bills and offer slightly higher returns than traditional savings accounts.​   

What is the safest investment?

Government securities, high-quality corporate bonds, and money market funds are generally considered the safest short-term investments. These options provide stability and lower risk, making them suitable for risk-averse investors.