Short-term investment ideas: Check how much return FD, RD, debt mutual funds and other investment schemes are offering in 1 year
Short-term investment ideas: If you want to invest for the short term, you can try investing in fixed deposit (FD), recurring deposit (RD), and debt mutual funds among many other options.
Investing can benefit you in multiple ways. It can create wealth for a lot of purposes like retirement, buying a home or any other financial goal. There are lots of short-term and long-term investment plans which may or may not provide you with fixed returns.
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FD, RD, debt mutual funds and other options
If you want to invest for the short term, you can try investing in fixed deposit (FD), recurring deposit (RD), and debt mutual funds among many other options.
Return on short-term investments
In this article, we will discuss investment ideas for one year which can also provide you best returns.
1- Fixed deposit
This is one of the safest investment plans. Let's check out the benefits of FD:
a) Tenure
You can invest in an FD from seven days to 10 years.
b) Interest rate
FD interest rates vary in different banks. It also depends on tenure.
c) Post Office FD
In the Post Office, you get an option to invest for 1-5 years.
d) Liquidity
FD can be renewed upon maturity. You can reinvest the entire amount if you want to.
e) Returns
For FD returns, you can choose options for quarterly, monthly, yearly, and half-yearly options too.
2- Debt mutual funds
If you want to invest for one year, then you can also choose the option of a debt mutual fund and invest the money in it for 12 months. Here are some benefits of debt mutual funds:
a) Risk factor
Debt mutual funds are not risky, they are better than equity mutual funds in terms of safety.
b) Liquidity
You can redeem the units in a short time if required.
c) Taxation
Tax is applicable if profits are made under 36 months, after this, it is taxed at the rate of 20 per cent post-indexation.
3- Arbitrage mutual funds
These are hybrid mutual funds that produce money returns by simultaneously selling and purchasing funds in multiple marketplaces to take advantage of differing pricing. A look at the features:
a) Tenure
These are open-ended funds. If you want to get the tax benefits, you need to maintain it for 12 months.
b) Liquidity
Liquidity is high in these funds as it is an open-ended scheme.
c) Taxation
You can also take the tax advantage.
4- Post Office term deposit
Tenure: You can invest money in this scheme from one year to five years period.
Liquidity: The pre-mature withdrawal is allowed after six months.
Returns on Post Office term deposit
Returns in Post Office term deposits are fixed.
5- Recurring deposit (RD)
This type of deposit requires recurring investments over a certain period alongwith a lump sum maturity fee. Generally, all banks allow you to create a Recurring Deposit (RD) account online.