Short and Long-Term Money Investment Options in India

The sooner you start earning, the sooner you start getting advice from your elders to invest.

For a better financial future and for meeting your future requirements without any financial crisis, you need to invest.

However, you cannot invest for your next year’s family vacation in the same way you invest for your retirement or your home.

There have to be two different investment options so that you can plan according. Keeping this in mind, we are discussing short and long-term investment options here.

Mentioned below are some of the top short and long-term investment options present in the market…

Short-Term Investment Options

As the name of this investment type suggests, short term investments options are designed in a way that they give considerable returns in a short span of time. This short span can be a year or sometimes a few months. In this way, these investment plans focus more to meet the requirements of the near future than the long-term plans. Some of the top short-term investment plans are:

1. Investing in Recurring Deposit (RD):This is one of the most secure short-term investment options wherein you can invest a fixed amount either in your bank or post-office every month. Most of the times, the lock-in period offered by a bank for a recurring deposit can be either 6 months or 1 year. You have all the rights to withdraw your money from your RD before the maturity date, however, it is always better to withdraw your money after it. This is because withdrawing after maturity gives you all the benefits associated with your investment.
2. Investing in Savings Account: Those who do not want to take any risk with their hard earned money, investing in a savings account is the best option for them. Even though the returns are not very substantial with this kind of investment, but the liquidity is really high. However, different bank accounts have different savings rate, so it is important to know the rate of interest offered by the bank before opening a savings account with it.
3. Investing in Mutual Funds with Large Cap:Mutual funds with large-cap enable to make an investment in the stocks of big business organizations in order to get substantial growth in a comparatively shorter period of time. Such an investment provides you smart and fast returns within one to three years of the investment.
4. Small Investment Plans with Fixed Maturity: The Fixed Maturity Plans are also known as FMPs. They are closed-ended debt funds and allow you to invest for a fixed short term. The tax efficiency of these plans is high and the tax that is applicable to them is dividend distribution tax.
5. Stock Market: People who possess good knowledge of share market and appetite of high risk can invest in the stock market without thinking much. You can make this kind of investment for long-term or for short-term depending upon your financial objective.
6. Investing in Systematic Investment Plan (SIP): An SIP is most useful when you suffer from a cash crunch. This is because you can discontinue your SIP within a limited period so that your long-term goals do not suffer.

Long-Term Investment Options

To make an investment for fulfilling your major goals of life, long-term investment plans are suggested. Some of the top long-term investment options are discussed below:

1. Investing in Public Provident Find (PPF): The PPF has a tenure of 15 years, however, the partial withdrawal of your investment is allowed from the 7^th financial year of your investment.
2. Investing in Employee Provident Fund (EPF): If you have invested in EPF, then you can perform partial withdrawal of your invested amount during the mid-term for constructing or buying a home through a registered builder.
3. Investing in Fixed Deposit: Fixed deposits are highly liquid in nature and you can withdraw them prematurity.
4. Investing in Unit Linked Insurance Plans (ULIPS): ULIPS have a lock-in period of 5 years after which the full or partial withdrawal is allowed.
5. Senior Citizens’ Saving Scheme (SCSS): This plan comes with a tenure of five years, however, you can opt for premature closure after the first and the second year of the investment.

Final Words

These are just some of the investment options. You can select one or multiple as per your requirements.

For long-term goals, you can opt for long-term investment plans and for short-term goals, short-term investment plans.

So, it is completely your choice to select a type of investment, and you can always select both.