Short-term investments are those investments which can be easily liquidated into cash when needed. Cash can easily be moved to other avenues with higher returns. The maturity period of these investments is comparatively shorter. Maturity period might range from a few days upto three years. This depends on your requirements and also your financial objectives. Usually smaller amounts can be invested via these investments.
Why should consider a short term investments?
When someone is looking out for maximum benefits from their hard earned money, short term investment is the best option available for getting the best from it, quickly and effectively. Apart from long term investments, short term investments are done in order to meet the financial needs at hands. Short term investment ranks at the top amongst those investors who are impatient and who can’t just wait for few years to have their money multiplied. One must not expect super high returns from short term investments, but to expect optimum ideal returns.
These are best short term investment plans in India for 2019
Peer To Peer Lending (P2P Lending)
P2P Lending also known as Peer-To-Peer Lending is a process of debt financing which allows individuals to borrow and lend any amount of money via a p2p lending platform such as Lendbox. It involves more time and effort when compared to other forms of short term investment. It is also known as social lending.
Features of P2P Lending
In P2P lending, the borrowers take loans from the direct investors at fixed interest rate ranging from 10.77% to 35.71% for duration as low as 6 months to 36 months, which is much higher when compared to other short term investments. Lendbox seamlessly connect verified borrowers with the investors with attractive rates of interest.
The borrower profile is listed on Lendbox after a strong credit screening and assessment - all of which is available for the investor to check and make a decision. The investor might give the full amount of loan required by the borrower or only a portion of it at a negotiated interest rate based on his risk appetite or borrower’s risk category. P2P lending might have several multiple sources.
P2P Lending Vs Other Investment Options
Though P2P lending is considered among other short term investments with high returns, it is a way different from others. P2P lending is not that much liquid when compared to other investments like mutual funds or bonds. P2P is a type of cash flow investment where the investor gets regular monthly return which is not possible with other forms of investments. Also, P2P lending does not come with volatility unlike equity funds.
Though the rate of interest is much higher than other investments, but it also comes with medium rate of risks associated with it. However, lenders can easily diversify their investments in small portions across multiple categories and lower the risk of default. Lendbox is an RBI licensed NBFC-P2P company providing the seamless lending experience adhere to RBI guidelines, an average lenders at Lendbox earns 25% in ROI with good diversification.
Category wise performance of Lendbox lenders is as follows:
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Various other short term investment ideas in India:
Getting with a savings account is the best option available. It is considered as the most simple option for short term investment and also the smartest choice of all. The returns you will get might not be superb, but the capital value that you invest remains intact without the fear of losing anything. It also comes with the ease of depositing and withdrawing your money. What else do you need? There are some banks which offer higher rates of interest on savings account with the clause that the investor maintains a minimum balance in his account.
It is that type of short term investment which is less volatile such as treasury bills and Government securities. Such investment plans come with maturity time range of 91 days. It is considered as least risky option among several mutual funds as it comes with no mark to market or MTM involved. It also comes with the option of easy liquidation.
FDs or Bank Fixed Deposits:
It has always been the most favorite among Indian investors. FDs offer the investors with higher rates of return when compared to savings account. The return rate remains fixed throughout the term of maturity. The term ranges from 7 days to 10 years, however the most common term is of 1 year.
Government bonds are among the most risk free short term investment plans. It offers fairly high rate of liquidity. The rate of interest is fixed in this type of short type investment. Bonds come with the assurance of getting back the amount of principal along with the interest being processed on the date of maturity.
To accomplish your goal of short term investment you can choose from the wide array of investment options available now. Also, one must choose wisely by assessing their financial goals along with expected returns. It might not happen that the investor is not getting high returns all the time in short term investment, but yielding moderate returns by taking lesser amount of risk is always recommended with proper planning of where you should land your hard earned money for the best risk free returns.