Any investment which has a term of 1 to 5 years is described as short term investment. There are numerous benefits in availing short time period funding plans, in comparison to their long-term counterparts. In a short duration plan, the risks are much less and the cash isn’t locked for a long time. Here’s a quick look on some of the most popular short-term funding plans.
One of the safest short time period investment plan available inside the market is fixed deposit. This scheme offers a hard and fast charge of interest starting from four to eleven percent in keeping with tenure. Though the cash cannot be withdrawn before the maturity period, interest is paid 3 months after the graduation of the deposit and is exempted from tax under phase 80C of the income Tax Act, 1961. Untimely withdrawals may additionally attract some penalty as defined by the bank.
Financial Savings Account
Another reliable and safe mode of brief time period investment is a savings account, which can be particularly used for liquidity. Opened with any bank or financial organization, money may be saved till required. Banks pay around four to 7% interest , depending on the amount and length for which cash is stored in the account.
It is taken as the best option on the subject of making an investment for a short tenure. The yellow metal offers protection and stability in times of inflation, financial crisis or social unrest.
5 Years National Financial Savings Certificates (NSC)
National financial savings certificate by way of the Postal branch of India has a time period of five years. Being an effective investment plan, the maturity amount is liable for tax exemption under section 80C. The interest acquired, however, is taxable.
Liquid finances, which have high liquidity fee, may be invested in certificates of deposits or quick time period securities supplied by the authorities. An individual can move out of the scheme at any time, at his convenience. This fund offers fixed current profits. For you to avoid fluctuating interest risks, the maturity of this fund is ninety days. The investor can pick out from certificates of deposit issued by industrial banks, company debentures or authorities treasury payments with a purpose to invest in a liquid fund.
Borrowers raise money from investors who are willing to offer money for a specific period of time by issuing bonds. When you buy a bond, you are offering your money to the issuer as a loan, which may be a government, municipality, or corporation. Individuals trying to diversify their investment profile can opt for bonds as a short-term funding plan.
Fixed maturity Plans
These are closed-ended debt schemes with a pre-decided maturity date investing in debt & money market instruments maturing on or prior to the date. Finances have a lock in the duration of 3 years. The fixed maturity plan is much like a bankтАЩs fixed deposit account.
Just compare best investment plans online today to get the best plan for yourself from several companies that are providing the same.
You can choose an online insurance web aggregator portal, take free quotes, compare and chose the best plan in a few minutes.
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