Know The Best Short Term Investment Options For Higher Interest Rates

Know The Best Short Term Investment Options For Higher Interest Rates

Nowadays, the majority of investors prefer parking their hard-earned funds in short-term investment products as they offer higher interest rates.

Short-term investment options carry low risk and promote savings. Their lock-in period is relatively shorter than that of long-term investment products. Besides, they’re ideal for the fulfillment of short-term financial goals such as purchasing a house or accumulating funds for marriage.

Here we are discussing the various short-term investment products that offer higher interest rates.

Best Short Term Investment Options For Higher Interest Rates

The 4 most popular short-term financial instruments that offer higher interest rates are:

1. Regular Savings Account

The first short-term investment option that comes to the mind of most investors is none other than a regular savings account. Besides offering liquidity, a regular savings account facilitates easy withdrawal, thereby giving one constant access to his/her funds.

Most importantly, the rates of interest vary on the basis of which the bank you choose for opening a regular savings account.

2. Short Term Fixed Deposits

Owing to the current FD rates, parking your funds in a fixed deposit is exceptionally safe and lucrative as the prevailing market forces don’t have any influence over your investment.

The lock-in period for this investment product can range anywhere from a week to 2 years. Although the facility of premature withdrawal comes with a penalty, the interest rates offered by this short-term financial instrument are quite attractive.

The minimum investment amount for fixed deposits is as low as Rs. 10,000. You can easily find out about the current FD Interest rates with the help of an FD calculator.

3. Liquid Funds

Liquid funds refer to a special kind of mutual funds that park your invested amount in market instruments like term deposits, government certificates, and so on.

The investments made in liquid funds are highly secure. Moreover, liquid funds come with the facility of premature withdrawal which allows an investor to retrieve his/her investments whenever there’s a requirement.

4. Recurring Deposits

You can go for recurring deposits if you don’t want to make a lump sum investment. The best part about recurring deposits is that you can invest funds in small intervals, e.g., monthly, etc.

The tenure of this investment product usually ranges from 6 months to 10 years. Furthermore, the interest earned on recurring deposits is also taxable.

Final Words

Short-term investment options are in much demand owing to their liquidity. If you want to earn risk-free high returns in a short period, then you should consider investing your money in a fixed deposit.

Make sure that you choose the best investment option for the fulfillment of your short-term financial goals.

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