People often believe that short-term investments don’t yield good returns, but investing in the right place can yield tremendous profits. If you want to avoid the risky options of the stock market, consider these five excellent and safe investment options, which offer both security and high returns! This information will be exceptionally helpful in achieving your financial goals in a short time.
Excellent Returns in the Short Term
When it comes to short-term investments, safety and liquidity become two of the most important factors. Liquidity refers to how quickly you can convert your capital into cash. Here, we’ve selected five reliable options that have the potential to deliver returns far higher than fixed deposits (FDs) while minimizing risk.
Fixed Deposits
Fixed deposits remain the most popular and reliable investment option today. You deposit money in a bank for a fixed period and receive an interest rate of 5.5% to 6%. Senior citizens typically receive slightly higher interest rates. The biggest strength of FDs is their complete safety. This option is ideal for those who are risk-averse. Although the actual return may be slightly lower due to rising inflation, this investment is completely safe.
Liquid Funds
Liquid funds are a category of mutual funds that offer exceptional liquidity. These funds typically invest in government securities, treasury bills, and short-term money market instruments, keeping their risk level very low. Liquid funds can offer returns of 6% to 7%, and you have complete freedom to convert your funds into cash at any time. They are much safer than the stock market and an excellent option for short-term investments.
Arbitrage Funds
Arbitrage funds take advantage of the price difference between shares and derivatives in the market. Because these funds capitalize on price differences and buy and sell simultaneously, they are considered much less risky than equity funds. These funds can typically deliver returns of 7% to 8%, especially during periods of extreme market volatility. This option is low-risk and performs well in short-term investments.
Corporate Bond or Corporate Debt Funds
Corporate bond funds invest in highly rated corporate bonds. These funds have the potential to deliver returns of up to 9.5%, which can be twice that of fixed deposits. They involve moderate risk, so it’s essential to select only bonds with a high credit rating. This option offers high returns for short-term investments, but requires careful selection.
Savings Account
Although a savings account isn’t considered a direct investment, it’s an excellent option for an emergency fund. It keeps your money completely safe and offers an interest rate of around 3.5% to 4%. It’s ideal for those who are risk-averse and need immediate liquidity. This option helps you grow your capital gradually, while mitigating the impact of inflation.
Making Smart Decisions Before Investing is Essential
Before venturing into short-term investments, it’s crucial to consult your financial advisor. Choosing the right option can yield strong and secure returns within 1 to 3 years. These safe options allow you to maximize returns while keeping your investments risk-free. Don’t rush; plan carefully according to your financial situation.