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Grow Your Wealth: Best Short-Term Investment Plans for High Returns

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Short-Term Investment Plans

In today’s fast-paced world, individuals often seek investment opportunities to give them quick and large returns. Short-term investment plans are an excellent option for those who want to maximise their profits in a relatively short period. Short-term investment plans can be a great option if you want to grow your wealth quickly and capitalise on short-term opportunities.

This blog post will explore some of the best short-term investment plans that can offer higher returns. Whether you have a specific financial goal or want to make the most of your available funds, these investment options can help you maximise your returns within a shorter time frame.

What are short-term investment plans? 

Short-term investment plans are those plans that are easy to liquidate and can be easily turned into cash. The duration of these investment palms is usually from 1 day up to 5 years.

Short-term investment plans are low-risk and involve trusted financial institutions and instruments such as fixed deposits, national savings certificates, and large mutual funds. If you don’t have an interest in a long investment horizon, short-term plans offer the best option as they can produce the best returns.

Best Short term investment plans to invest

Here are some of the best short-term investments that not only help you get excellent returns, but also offer tax benefits.

1. Liquid Funds 

Liquid funds are debt mutual funds that invest in short-term financial instruments such as commercial paper, certificates of deposit, and treasury bills.

These funds have a maturity of 91 days and are highly liquid. Low investment risk and predictable returns make it an ideal short-term investment plan.

Liquid Funds have no block period and can be terminated at any time. Furthermore, there are no entry or withdrawal fees associated with these funds, making them even more appealing. Additionally, they offer higher returns compared to savings accounts and bank FDs.

When it comes to the tax implications, if the holding period of the investments in these funds is less than three years, the short-term capital gains (STCG) are subject to income tax at the applicable rate.

If the investment holds more than three years, the long-term capital gains (LTCG) are subject to a 20% inflation index beginning on April 1, 2023, at the investor’s IT tax rate. Therefore, the profit counts as taxable income of the investor regardless of the holding period of the investment.

2. Corporate Deposits 

Non-bank financial companies (NBFCs) offer corporate deposits for terms ranging from months to years. Rating agencies typically rate these short-term investment plans, allowing evaluation based on their creditworthiness. Corporate FDs offer more favourable rates than bank FDs and have early payment options under certain conditions.

These FDs are best suited for investors with short-term goals and low-risk tolerance. However, the risk also depends on the credit rating.

Choose FDs with higher credit ratings, such as AAA, to lower default risk. Before investing in a corporate FD, it is better to check the credit rating, corporate background, repayment history, etc.

By assessing these parameters, you can easily determine potential risk, creditworthiness, credit score, and stability. Interest income on corporate deposits is subject to the same income tax rate as fixed deposits.

3. Fixed Deposit 

Fixed deposits are the best short-term investment plan with the bank’s guaranteed return and NBFC offer. A fixed deposit requires a lump sum payment. Investments come with lockup periods ranging from 7 days to 10 years.

FD investments are automatically credited to your account and produce a specific return at a fixed interest rate. Depending on the system, interest may compute on a monthly, quarterly, semi-annual, or annual basis

In FD programmes, interest payments are provided on time and on schedule. As a result, you can choose to take out the accruing sum at maturity or reinvest it in either the same FD system or a different one. Furthermore, it’s worth noting that there are various FD programs available for both Indian residents and NRIs.

Tax Savings Investments in FDs are tax-exempt under section 80C of the Income Tax Act 1961. However, income from all FD investments is subject to tax liability at the income tax rate.

4. Post Office Time Deposit 

As the name suggests, the Post Office Fixed Deposit (POTD) is an FD system offered by the Post Office and is considered to be the best short-term investment.

The Treasury sets interest rates for these plans every quarter. Interest rates are based on government bond yields and government sector yields. POTD maturities are 1, 2, 3, and 5 years.

Interest can be reinvested in the system. However, this option is not available in his 1-year TD. Post offices can pass POTDs from one to another. Under Section 80C of the Income Tax Act of 1961, investments up to INR 1,50,000 per annum are tax-exempt.

5. Recurring Deposits 

Recurring Deposits (RD) are a small savings opportunity that allows for regular monthly investments. Monthly instalments are fixed for the entire deposit term and are offered by banks and post offices. This short-term investment program ranges from 6 months to 10 years.

Banks fix and vary the interest rates, and interest is calculated on a quarterly basis. After maturity, you must pay a lump sum (principal + interest).

Under Section 80C of the Income Tax Act 1961, only investments in Post Office RDs are exempt from tax. The maturity amount is taxed at the investor’s income tax rate.


Short-term investment plans can be a smart strategy for growing your money if you have specific financial goals and a limited time horizon.

However, before embarking on a short-term investment strategy, it’s vital to consider factors such as your risk tolerance, liquidity requirements, and investing goals. By taking these aspects into account, you can make informed decisions that align with your financial objectives.

By diversifying your portfolio and staying current on market trends, you can make informed decisions and maximise profits in less time.

It is essential to consult a financial advisor or conduct thorough research before making any investment decision. Furthermore, taking into account expert advice or engaging in comprehensive research can provide valuable insights and guidance.

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