Have an appetite for risk and ready for some quick investments? With rising interest rates, investors with surplus money have a plethora of opportunities to invest for short periods. Here’s a look at some of them.
There are no hard and fast rules to gain handsome returns in a short span. But with the BSE and NSE indices giving more than 35% annualized returns, equities have become a mouth-watering proposition. Let’s look at some broad categories for short-term investments, including equities.
The return of capital is certain in debt instruments, making them a good option to invest in. Low risk investors can always avoid the volatility in the stock market and park money here. Currently, such schemes provide up to 10.5 percent returns before tax deduction.
Generally, all the funds have an investment horizon of more than a year with few exceptions. Entry and exit loads act as barriers. Certain MFs which invest in securities have a maturity of one day to three months. Over the past financial year, these liquid MFs have given an annualized return of 8–10 percent.
Fixed Maturity Plans
As compared to fixed deposits, only a dividend distribution tax is applicable on these. They are predominantly close-ended products (investment in debt instruments).
This well known option of investment is offered by public and private sector banks with 9.5–10 percent rates (for senior citizens) on FDs with different tenures.
High risk investors with some financial acumen will be able to earn handsome returns in a short time. Almost all the segments like blue chip, textile, and infrastructure have been doing well with a booming economy. Derivatives and commodity trading have also become features of short term investments as deals can be squared soon.
All the above options are on the table keeping in mind a short investment cycle (6 months–1 year). Do not forget that the majority of short-term investments like equities have short-term capital gains tax associated with them.
Know of any more tips to rake money in quick? Share your knowledge and give other readers a chance to bring in the moolah!
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