Last Updated:July 04, 2025, 10:26 IST
The short-term investment entails locking your sum for a shorter duration for decent returns to ensure small investors can meet their near-future requirements.
Best options to get good returns on short-term investments. (Representative Image)
Short-term investments are investments made for a small period, usually spanning days, months or a single year, where investors lock in a lesser amount of money. The main purpose of a short-term investment is to earn decent returns with low risk. Short-term investments are also termed market securities and help safeguard your money while providing financial stability and ensuring you can make stress-free expenditures on your future needs. Investors usually treat short-term investments as another source of income, a quick and faster way to multiply their wealth.
Best Short-Term Investment Options For Small Investors In India
Savings Bank Account
One of the common forms of short-term investment is opening a savings bank account to save your money and grow it. While the risk involved is 0, multiple banks in India offer decent interest rates for opening a savings bank account. These interest rates usually range from 3 to 6 per cent. Opening a savings bank account is a liquid investment with no high returns. You can withdraw or transfer your money as and when required through ATMs and the Net Banking facility.
Fixed Deposits
Small investors also look to make their short-term investments through Fixed Deposits. When you put in some amount of money in Fixed Deposits, the bank provides a fixed rate of interest until the duration of the FD is over. Short-term investors can open a Fixed Deposit with a duration ranging from as short as a week up to ten years. Fixed Deposits also offer higher returns on the savings account while retaining their 0 risk feature. Interest rates on Fixed Deposits range from 8 to 9 per cent, which makes it an attractive option.
Mutual Funds
Mutual Fund investment is another form of short-term investment. By pooling money from various investors through the purchase of shares, stocks and bonds, Mutual Funds can offer a high interest while locking a small amount of money. The only caveat: the market risks involved are also high. But if the investment pays off, you can expect returns of up to 8-10 per cent.
National Savings Certificate
A fixed-income investment option offered by the Indian Post Offices, the National Savings Certificate (NSC), is a government-backed scheme that encourages investors to lock in small savings while benefiting from the income tax policies. Investors can fix their sums for a period of up to five years and earn interest rates of 9-12 per cent. But the money can’t be withdrawn before the scheme’s maturity.
A team of writers and reporters decodes vast terms of personal finance and making money matters simpler for you. From latest initial public offerings (IPOs) in the market to best investment options, we cover al…Read More
A team of writers and reporters decodes vast terms of personal finance and making money matters simpler for you. From latest initial public offerings (IPOs) in the market to best investment options, we cover al… Read More
- Location :
Delhi, India, India
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