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Short term Investment options for High Return

Money is the catalyst which motivates you to pursue your dreams of leading a wealthy, affluent life. In India, a moneyed person is respected for his opulent lifestyle.

When a person becomes mature, his focus change from the carefree days, to become a moneyed man to satiate his desire for being prosperous. Wealth creation becomes his motto.

To become a well to do person with deep pockets, you have to generate income by becoming a professional. Working in an office or any establishment gives you remuneration for the work you are doing.

You may become a businessman yourself or join your family business.

In both these types of work, you are working to make a living. One cannot just go on working or doing business for years together to make a substantial amount of money for your old age.

Your ingenuity is when you save money accumulated by you into a corpus by regular short-term investments and make the money work for you.

In other words, investing the corpus money wisely is the key to a dream future. In the initial period of your career or business, it will be advisable to save money and invest in short-term investments regularly for high returns.

Since you have accumulated substantial wealth through this process, now is the time to think big. All these activities should be completed before you turn 30 years of age

.If you have become well conversant with financial investments then it’s wonderful, if not avail the services of a good fund manager. Being an expert in the financial management of portfolios, your dreams of a golden future will certainly materialize.

1. Major Banks in India- Investments

Being a working professional or a business man, you are required to open a savings bank account, for keeping the money earned. Opening a savings account for all citizens who are earning money or have earned money is a necessity.

The government has taken steps to ease the financial transactions conducted by the people, making it transparent and prevent accumulation of black money.

Savings Bank Account is the first investment platform undertaken by any individual. The savings bank account is compulsory for making any investment in any other financial instrument.

The account number has to be linked to investor receive any remittance. The savings bank account offers safety, ease of operations and liquidity.

The present savings bank rates vary from bank to bank starting at 4% per annum to 7.25% per annum.

The savings bank accounts can be operated online and ATM’s are placed at the strategic location everywhere, so there is no necessity to physically go to the bank for any business.

In the villages, people have to visit the bank for any financial transaction. A large number of public sector banks and private sector banks are available throughout the country. Maximum bank customers avail this investment option due to the simplicity of operations.

Fixed Deposits in banks are the second most sought after short-term investment options, mostly by the middle class who are hesitant to take risks with their money for investment.

The investment tenure is from a week till a decade. There are a wide array of options offered by the public and private sector banks regarding the tenure and % assured returns.

Due to the transparency, short duration and safety of returns, people are motivated to invest in FD’s. A guarantee of 1 Lakh rupees is assured by the government agencies in case of default.

Since the investment tenure is agreed upon by the investor and the bank, penal provisions are there if the sum of money invested is taken out from the bank before the maturity date.

Recurring Deposits is a short time investment for a short period of 6-12 months, favorite with a section of people, who want to steadily build a corpus of funds for fulfilling their dreams

• Buying a Motorcycle, Refrigerator, paying for your children’s tuition fees, going out with your family for an annual vacation become achievable.

In this investment a fixed sum is deposited at the bank at a regular interval. The interest rate is calculated as per the payment cycle and tenure of investment.

The accrued money with interest is paid to the investor on the maturity date. A minimum lock-in period of a month is enforced by the bank.

If the accumulated money is withdrawn in the first month itself, no interest will be payable. If the money is withdrawn before the maturity date, payment will be done as per the applicable rates for the period of deposit.

Flexible Fixed Deposits is a scheme where the surplus money in your savings bank account is automatically transferred to your fixed deposit. A minimum balance as advised by the bank is kept in the savings account, any amount accrued above the minimum value is shifted to the Fixed Deposit.

Equity Linked Savings Scheme-Short Term

This is an equity diversified fund and the customers can avail of good capital appreciation and tax benefits. Equity Linked Savings Schemes investments are eligible for exemption of income tax under the 80 C category.

The maturity amount including the invested amount, interest accumulated and the dividends are absolutely tax-free, which is a favorite among investors who want to invest their money for 3 years and earn a sizeable profit.

The ELSS funds are invested in equity or equity related instruments. The pitfall is that you cannot withdraw any funds before 3 years.

Major companies offering ELSS schemes are. L&T Tax Advantage, Motilal Oswal, Aditya Birla SL Tax, BOI AXA tax advantage, Kotak Tax Saver, Reliance Tax Saver.

invested in floating interest securities and fixed interest securities. Investment is done in bank loans, bonds and debt securities of different types.

Around75% to 100% of the money invested in Floating Rate mutual Funds are invested in variable interest securities.

The floating rate funds are preferred over the fixed interest securities, as the interest rate component is stable with fewer ups and downs and a high yield.

The short-term floating rate mutual funds are aligned with short-term maturities, favored by the investors because of its faster liquidity. Credit Losses are minimized with the floating Rate MF’s.

Arbitrage Funds

Mutual funds which make a profit by buying and selling security instruments on separate exchanges are known as Arbitrage funds. Arbitrage fund buys stock in the cash market and sells that instrument in the futures market.

The returns are dependent on the unpredictableness of the asset. Arbitrage funds are low risk and a safe investment.

The taxation involved is similar to that in equity funds. When the financial markets are unstable, investing in arbitrage funds is the perfect answer to earn profits. Arbitrage funds are invested in stocks and bonds.

Prominent companies offering these funds are Reliance arbitrage funds, Edelweiss arbitrage funds, SBI arbitrage Funds, L&T arbitrage funds, Invesco India arbitrage, Kotak Equity arbitrage, IDFC arbitrage fund, Axis arbitrage Fund, ICICI Pru equity-arbitrage. ABSL arbitrage Fund.

Gold & Silver Investments

You may recollect that on the auspicious occasions of Akshaya Tritiya, Dhanteras people all over India purchase gold & silver symbolizing the advent of Goddess Laksmi for their financial prosperity.

On the occasion of marriages, people buy a lot of Gold and silver to gift to their daughters as stree dhan. The significant aspect by this simile is that Gold and Silver are purchased by Indians as a buffer to any economic crises in the family.

If any unfortunate event happens and you have lost money heavily in it, Gold and silver come to your rescue to salvage the situation. During any uncertainty in the economy of any country, gold is traded for a short time.

Trading is done because of its high value, liquidity, and security. Gold is an insurance cover against upheaval in the stock markets.

Prices of stocks may plummet down due to unstable market situations, but gold prices provide you a cover against any eventuality. Gold prices rise consistently barring a few instances where the prices became static.

National Savings Certificates

The National Savings Certificate (NSC) is a Government of India initiative to encourage investors to save money and at the same time get a rebate on their total income tax liability.

This financial instrument is available only in post offices all over India.NSC gives guaranteed interest and complete capital protection.

There is no maximum limit for investment, but if you invest Rs 1.5 Lakhs in this scheme you get a substantial relief from your income tax present NSC instruments carry an interest rate of 7.6% per annum.


The financial investment arena is extremely big in India. A Plethora of short-term investment schemes along with long-term investment schemes is available for the Indian public. Investing in equities in the share market requires a thorough understanding of the pits and falls involved in the trading. The Indian middle class is wary of investing in shares because of the volatility of the share market and invest in short-term investment options for high returns ensuring safety, security and easy liquidity.

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