FIVE INVESTMENT OPTIONS TO MAKE MONEY IN THE SHORT TERM

Do you have some funds you wish to invest for a short term to achieve your short-term investment goals? Short-term goals could be anything that can achieved within a span of three to five years. These goals could be anything from paying your child’s tuition fees to restocking your emergency fund to buying a new phone to planning a vacation, to renovating your house, etc. But where should you invest these funds? In this article, we will understand different investment options that can help you achieve your short-term investment goals.

Investment options to make money to achieve goals in the short run

Here are a few investment options that you can consider for fulfilling your short-term investment ideas:

1. Short-term debt funds
   Debt funds are ideal for investors who have a low risk profile and are looking for steady returns from their investments. Debt funds consist of ultra short duration bond funds, liquid funds, money market funds, low duration bond funds, and so on. These funds invest in securities that generate fixed income such as treasury bills (T-bills), government securities (G-secs), money market instruments, corporate bonds, commercial paper (CP), etc. These types of mutual funds are considered a safer investment avenue than equity funds as the returns on fixed-income securities are not affected by market fluctuations.
2. National savings certificate (NSC)
   NSC are tax-saving investments backed by the Government of India, making them relatively safer than other investment options. The returns on NSC schemes are revised by the government each quarter. An investor can avail of tax benefits of up to Rs 1.5 lac per annum by investing in these tax-saving investments under Section 80C of the Income Tax Act, 1961.
3. Bank fixed deposits (FD)
   Bank fixed deposits are another short-term investments that offer tax benefits to investors. An investor can park a lumpsum amount of money in these tax-saving investments for a fixed period of time. These investment options are ideal for those investors who are looking to park their idle funds in safe investment avenues that offers assured returns to investors.
4. Recurring deposits (RD)
   Unlike bank fixed deposits that require investors to make a one-time investment or lumpsum investment, these investment options permits investors to make monthly installments, offering investors with a higher level of flexibility. An investor can open a recurring deposit account online, through a post office, or through their nearest bank. The interest earned on recurring deposits are added to the overall taxable income of an investor and taxed basis their income tax slab they fall into.
5. Post office time deposits
   Other popular short-term investment plans include post office time deposits that have varying investment duration of 1 year, 2 year, 3 year, or 5 years. These schemes are eligible for investors aged 10 or above. As these investment options fall under Section 80C investments, they are eligible for a tax deduction of up to Rs 1,50,0000 per annum.

These are just a few of the short-term investment options that you can consider investing in for a short duration. Before you invest in any type of investment, it is essential that you ensure that the objectives of the funds are in line with your financial goals, investment tenure, and risk profile. Happy investing!