Everyone understands the benefit of investment, but many individuals avoid spending their funds on any investment option because most of the investment options come with a lock in period. Individuals never wish to lock their money in case their family needs it in emergencies. In such cases, it is advised to invest in short term investment plans.
What are short term investment plans?
Short term plans are the ones that come with a shorter term of lock in period. One can invest for a shorter term in such investment options without blocking their money for longer tenure.
When an individual is looking to invest into a plan that is secured, short term and less risky, he must opt for short-term investment plans, few of which are :
- Saving account : This is an investment option with maximum liquidity in which money can be withdrawn anytime when required.
- Liquid funds : It is a mutual fund that invests money in securities and government certificates.
- Recurring deposits : This lets an individual invest monthly as per the availability.
- Fixed deposits : This lets an individual deposit money to ensure a high rate of return.
Benefits of short time investment plan
- Lower risks : Short term plans are stable options as they involve less risk when compared to other investment choices.
- Tax benefits : Short term plans also help in tax saving, in accordance with current tax laws
- Cash for emergencies : With shorter lock in period it lets individuals access the invested money with profit quicker.
- Profit in short time : While investing into short term investment, individuals can ensure profit early.
While an individual wishes to hold their money for a year ranging one to three years, investing into short term investment plans is the best choice. It accumulates profit in just a short tenure and helps plan major financial decisions easily. While choosing the best short-term plan, it is important to analyse the lock in period, profit and risk factor associated with it.
short-term investments are among the best investment options that can protect money and also help earn incur profit without actually locking it for longer duration. It is important to choose best short-term investment plan to ensure better returns.
*Tax benefits are as per the Income Tax Act, 1961, and are subject to any amendments made thereto from time to time
The article is meant to be general and informative in nature and should not be construed as solicitation material. Please read the related product brochures for exclusions, terms and conditions, warranties, etc. carefully before concluding a sale.
Make responsible financial decisions. Consult with your financial advisor before making any decisions on insurance purchase.