3 min read
Dec 21, 2023
When seeking to enhance your wealth without committing to long-term investments, short-term investment options become invaluable. Whether you have imminent financial goals or require easily accessible funds for emergencies, avenues such as Fixed Deposits, Recurring Deposits, and Liquid Funds provide excellent solutions.
From Fixed Deposits offering guaranteed returns to Liquid Funds ensuring quick liquidity, discover short-term investments tailored for both safety and profit.
Fixed Deposits: The eternal classic
Let’s commence with Fixed Deposits, the stalwart of traditional investments in India. If safety is your paramount concern, Fixed Deposits offer security for your funds, ensuring guaranteed returns through a predetermined FD interest rate.
What makes Fixed Deposits reliable
• Assured returns: Your FD interest rate is locked upon investment, shielding your earnings from market fluctuations.
• Tenure flexibility: Tailor your investment duration, ranging from a week to a decade.
• Financial cushion: In emergencies, opt for a loan against your FD.
Among the top Fixed Deposit options available, Axis Bank’s Fixed Deposit stands out as a worthy companion. It provides customizable investment tenure, attractive FD interest rates, and the option to link your FD seamlessly with your Savings Account for automated renewal features.
Also Read: Know the different types of Fixed Deposits
Recurring Deposits: Steady growth through regular contributions
Recurring Deposits (RDs) empower you to invest smaller amounts at regular intervals, facilitating the building of a financial corpus without straining your budget. Why Recurring Deposits make are a solid choice:
• Low minimum investment: You can start with as little as ₹500 per month.
• Systematic savings: Consistently invest a set amount, promoting fund compounding at a fixed rate.
• Flexible tenure: Choose an investment term from 6 months to 10 years.
Liquid Funds: A blend of accessibility and earnings
For those seeking quick access to funds without compromising returns, Liquid Funds emerge as a robust short-term investment contender.
Why Liquid Funds stand out:
• Liquidity: Get your money within one working day, making them ideal for unforeseen emergencies. Some liquid funds also offer instant redemption of up to Rs 50,000 per day.
• Stable returns: Investing in short-term money market instruments, such as treasury bills, certificates of deposits, and commercial papers, offering the potential to earn market-linked returns.
• Low risk: With investments in high-quality, short-term debt securities, they typically carrying lower risk compared to other mutual funds.
Making your choice
Choosing the right short-term investment scheme hinges on your risk tolerance, liquidity needs, and targeted returns. Fixed Deposits and Recurring Deposits cater to the risk-averse, while Liquid Funds offer higher returns for those open to a moderate level of risk.
Making the right choice between Fixed Deposits, Recurring Deposits, and Liquid Funds boils down to a few key considerations:
| Factor | Fixed Deposits | Recurring Deposits | Liquid Funds |
|---|---|---|---|
| Returns | Fixed | Fixed | Market-linked |
| Risk appetite | Low risk | Low risk | Moderate risk |
| Liquidity | Penalty is levied in case of premature withdrawal | Penalty is levied in case of premature withdrawal | Redemption payment is typically made within one working day. |
| Maturity | 7 days to 10 years | 6 months to 10 years | Invest in debt securities having maturity of 91 days |
In summary
In today’s fast-paced world, your money shouldn’t be idle. With options ranging from Fixed Deposits to Recurring Deposits and Liquid Funds, short-term investments offer a smart way to grow your wealth in a shorter span.
Disclaimer: This article is for information purpose only. The views expressed in this article are personal and do not necessarily constitute the views of Axis Bank Ltd. and its employees. Axis Bank Ltd. and/or the author shall not be responsible for any direct / indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information. Please consult your financial advisor before making any financial decision.
Mutual Fund investments are subject to market risk, read all scheme related documents carefully. Axis Bank Ltd is acting as an AMFI registered MF Distributor (ARN code: ARN-0019). Purchase of Mutual Funds by Axis Bank’s customer is purely voluntary and not linked to availment of any other facility from the Bank. T&C apply.
