Posted 28 Jan, 2019 | Finance
What are the best short term investment plans?
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1. Savings account
As one of the preferred choices of most people, savings accounts offer maximum liquidity. This helps you withdraw funds anytime and anywhere without any hassles.
2. Liquid funds
Liquid funds are a type of mutual fund that invest your money in short-term government certificates or securities. It is possible for an investor to withdraw money from these funds at any time.
3. Recurring deposits
These deposits can be opted for in case you do not want to invest a lump sum amount in one go. Recurring deposits offer you the flexibility to invest money monthly.
4. National Savings Certificate (NSC)
This investment option has a tenor of 5 years. All you need to do is visit your post office and complete a simple application process. An advantage of NSCs is that you can claim tax exemptions under section 80C of the Income Tax Act. Again, the interest earned is taxable.
5. Fixed deposits
Fixed deposits are easily among the best options for short-term investments. They offer a high rate of return, independence from market fluctuations and interest rate volatility, and high flexibility in terms of tenor period. You can also withdraw your deposit during times of emergency by paying a penalty.