Often when one thinks of investing, they focus on the long term.
As a result, they focus on benefits such as cost averaging and compounding. However, short-term investment plans for 6 months can also yield considerable returns within a short period. The upside is that most short-term investments, such as KredX’s Invoice Discounting, have low-risk plans with maximized returns.
This article offers some of the top short-term investment plans for 6 months that investors should consider.
What Are Short Term Investments?
Short-term investment plans are the ones that can be liquidated within a short period, preferably 3-13 months.
These investment plans help investors safeguard capital while generating profit. Compared to conventional saving accounts, short-term investment plans offer significant returns within a short period.
The Top Two Best Short Term Investment Plans To Consider For 6 Months
1. Invoice Discounting
Invoice discounting is widely used in India, wherein businesses get funds using their unpaid invoices as collateral from financiers. It is a good investment option for investors who invest their money in short-term investment plans.
For instance, KredX’s invoice discounting platform offers returns of up to ~12-14% within 30 to 90 days. Invoice discounting provides high returns since earnings are tied to the underlying business’s creditworthiness instead of market conditions. In addition, liquidity is high, with the investments expected to mature within 90 days.
2. Cash Management Accounts
Cash management accounts are savings accounts offering higher interest rates relative to those provided by conventional savings accounts. CMAs can be considered short-term investment plans for 6 months for individuals seeking a secure, high-return investment option.
Other Short Term Investment Plans for 6 Months
3. Savings Account
Checking or saving accounts are short-term investment plans for 6 months that are easily accessible to investors. The exciting thing about saving accounts is that they are highly liquid, and investors can readily access their funds. Interest rate is low, but they are an excellent option for investors concerned about security and liquidity.
4. Digital Gold/Silver
Digital gold/silver is another short-term investment plan for 6 months investors should consider. For instance, digital gold is backed by physical gold, enabling investors to purchase and hold gold digitally. It is a convenient way of buying gold without worrying about its security and storage.
The other upside is liquidity.
Like most short-term investments, digital gold/silver is highly liquid and can be converted to other cash whenever the investor needs funds.
5. Debt Mutual Funds
These investment funds mainly invest in the debt market (also called as bond market) in instruments like corporate bonds, government bonds, commercial paper, treasury bills, and other similar instruments. In India, various debt mutual funds have varying tenures and underlying asset sizes. As a result, they are less risky than equities and offer considerably consistent returns in the near term.
What To Consider Before Investing In Short-Term Plans
Risk Tolerance
Short-term investment plans for 6 months aim to protect capital, and as a result, minimal risk is acceptable. However, risk varies considerably within short-term investment plans. For instance, mutual funds may have a considerable risk relative to a savings account. Therefore, a risk/reward assessment is necessary to determine if the associated risk with an investment is justifiable. Investors that don’t have a high-risk tolerance should avoid high-risk funds. However, these funds are ideal for those that can weather these risks because of the promise of high returns.
Liquidity
Liquidity is the most critical factor when considering short-term investment plans for 6 months. Investors want to be sure that their cash is available when needed. Consider investments with low lock-up periods and minimal penalty for premature withdrawal. Investors must know that some short-term investment plans are easier to liquidate than others.
Investment Plan Requirement
Investors should risk a lot if they need cash sooner. Therefore it is advisable to consider high-risk plans such as cryptocurrencies.
Conclusion
Therefore, short-term investment plans for 6 months are a great way of generating returns within a short time. However, although these investments promise high returns within a short time, some risk is involved, albeit minimal. Therefore, due diligence is vital before investing in any plans discussed.
For investors searching for high-return and low-risk short-term investment plans for 6 months, KredX’s Invoice Discounting ticks all boxes.
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