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Short Term Investment Options In India

Published On Nov 15, 2021

In the investment strategy, short-term investments play a critical role. Short-term investments, such as savings plans, are primarily used to save money for a specified purpose. A short-term investment is one that lasts fewer than 5 years. Short-term objectives are made to accomplish inevitable events that will occur soon. 

Purchasing a bike for your child when he graduates, or a luxury car for your family three years down the road, are all short-term aspirations that demand short-term investments. You may be able to postpone some of them, but you will not be able to postpone all of them. If you want to attain certain goals in the near future, you must avoid taking any risks and be very specific in your judgments. In this article, we have presented an array of options available in the Indian market that cater to your short term investment plans.

Different Short Term Investment Options In India

Following are some of the most popular short term investment options in India - 

1. Fixed Deposit (FD)

Lack of liquidity and low interest rates are two significant reasons why many people avoid this type of investing.  What people miss out on is that the straightforward and uncomplicated FD, on the other hand, can be utilised to build wealth. When the stock market suffers a setback or returns are uncertain, the good old FD clearly outperforms other types of investments.  It has always proved to be a good short term investment option that can’t be overlooked.

2. Systematic Investment Plans(SIP)

Systematic Investment Plans (SIPs) are best used over the long term, although they can also be used for shorter periods with good results. If you have a one-year investment horizon, start a SIP in large-cap mutual funds, which invest in huge companies that can rise quicker in the market.

3. Savings Account

In India, one of the most popular short-term investment options is the savings account. It's a savings account with a bank or other financial organisation where you can save money and earn interest. It offers the highest level of liquidity because users can withdraw their invested funds at any time. Furthermore, there is no restriction on the amount of money that can be deposited, and numerous banks offer accounts with no balance.

4. Term Plans

Term plans are one of the safest and simplest investment choices you can access. It provides death benefits to the beneficiaries of the life assured along. Term insurance is required if you are a family wage earner. When you acquire term insurance, you may rest easy knowing that in case of an unfortunate future event, your income would be replaced.

5. Recurring Deposits

This is a sort of secured investment that is suited for those who like to invest on a monthly basis rather than in a big payment. Customers can invest an amount of their choice each month and save money with ease thanks to recurring deposits (RD).


Short-term investments are the most effective way to achieve your short-term financial objectives. You can assure financial freedom with short-term investments, which can help you manage unforeseen expenses. Furthermore, it allows you to withdraw money whenever you need it without having to wait a long period. Furthermore, short-term investment plans give stability, liquidity, and minimal transaction costs, allowing you to generate huge returns in a short period of time, demonstrating ways to greatly prevent undesired difficulties.

Also read - Factors To Consider While Buying Life Insurance Policy

Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.

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