A short-term investment, also known as a temporary investment, are investments that are made for a limited timeline, generally for one to three years or less. Unlike long-term investments, which ensure a great return over time, short-term investments are lower risk investments with a smaller return and they are generally highly liquid. Short-term investments generally include marketable equity and debt securities. Short-term investments have a less risk factor and it also provides a healthy return without taking chances. Short-term investments are designed to offer optimal returns and liquidity over a short period of time. Such investments can be made for a year or even a period of few months. Short-term investments are focused to meet the expenses for the future.
The best short-term investment ideas are:
- Savings account
- Debt instruments
- Recurring deposit
- Large cap mutual funds
- Treasury securities
- Stock market
7. Fixed maturity small investment plans