Looking to park ₹5 lakh for a short period — say, anywhere from a few weeks to a couple of years? Then safety, liquidity, and stable returns should be your top priorities.
While equity markets may offer high rewards, short-term investments in stocks can expose you to unpredictable swings and even capital loss. If you're looking for smart, safer options, here are some ideal short-term investment avenues:
🏦 1. Fixed Deposits (FDs)
FDs are still one of the most trusted options for short-term investors. Banks offer tenures starting from just 7 days to up to 10 years, but for short-term goals, a 1–3 year FD is ideal.
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Returns: Around 6.5% to 7.5% p.a.
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Risk: Very low
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Liquidity: Premature withdrawal possible (may attract penalty)
📆 2. Recurring Deposits (RDs)
If you prefer spreading out your investment instead of locking in the entire ₹5 lakh at once, RDs are great.
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Invest a fixed amount monthly
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Choose your desired tenure
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Suitable for disciplined saving with predictable returns
💸 3. Liquid Mutual Funds
These are low-risk mutual funds that invest in very short-term debt instruments like Treasury Bills, Commercial Papers, and Certificates of Deposit.
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Returns: Typically 4% to 6.5%
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Withdrawal: Often processed within 24 hours
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Risk: Low, but not risk-free (NAV can fluctuate slightly)
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