Best Investment Plan for 1 Year Secure Returns in Short-Term Investments

The financial world today is fast-paced with rapid evolution and technological advancements. Thus, most of us find ourselves needing plans for investments that come with good returns and no commitments towards facing risks for the long haul. So, this can be for any purpose, right from parking surplus money to saving up for any big-ticket purchase in the near future. Short-term investments come with several perks if you’ve got a horizon of roughly one year. Here is a closer look at the best investment plans for 1 year that you can consider.

1. Fixed Deposits

FDs are some of the safest investments that you will find in the country. They are ideal for the short term and you can choose banks offering tenures from 7 days to a year, as per your preferences. The rates of interest usually hover around 4-6% on average, although they can be higher for senior citizens at most banks. Your returns will be guaranteed without any worries regarding market risks. This will suit you if you have a low-risk temperament.

2. Recurring Deposits

RDs are also one of the best investment plans for 1 year that you can check out. They offer attractive returns and you can deposit a fixed sum every month for a year. Interest is similarly compounded as FDs and they are predictable too. Your money will stay safe and you can plan your future purchases/transactions accordingly.

3. Debt Mutual Funds

Many investors prefer debt mutual funds for the short term. This includes ultra-short-term and liquid funds which deploy money in corporate debt, government bonds, money-market instruments, etc. They offer higher stability and lower risks along with moderate returns (approximately between 4-8% or slightly more). They have lower volatility in comparison to equities and are also tax-efficient with indexation benefits on long-term capital gains (if you’re in the higher tax bracket).

4. Post Office Term Deposit

They are almost like FDs offered by banks, although they are provided by the Indian Postal Service. You can get 6-7% as your interest rate for a one-year investment, with the money being completely risk-free and secure. This is another ideal bet for conservative investors.

5. Corporate Fixed Deposits

Several top-rated entities offer these corporate fixed deposits which have higher rates in comparison to conventional bank FDs. They have slightly more risks, although the rates can be around 7-8% or more in a year. However, check the credit rating of the company carefully before investing (from leading agencies like ICRA or CRISIL) along with its financial position and overall reputation.

1. Which Option is the Best One for You?

If you’re more about low risks and safety, then choose post office term deposits or bank FDs. However, if you’re okay with slightly higher risks and returns, then corporate FDs or debt mutual funds can be considered. An RD is ideal if you’re looking to go small with disciplined contributions every month. Choosing the best investment plan for 1 year has a lot to do with your tolerance for risks and the returns that you anticipate. It is best to go for investments that sync with your short-term or immediate financial goals, while offering ample security and lower risks at the same time.