A short term investment or say temporary investment is an investment which yields its return within a year or two. There are plenty of good options available for those who do not have to invest for long term or only in stock market. There are various other short term investment options that can earn you decent earnings. If you have a shorter time frame you surely won’t be able to invest in stock market. Here are some options for short term investment strategies.
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Savings Bank Account is a deposit account held by bank and on the amounts deposited bank pays interest to customers. This is the most orthodox way of saving money and set aside amount from income on regular basis. One can withdraw any amount at any point of time from their savings account. Certain average monthly balance should be kept in such accounts based on bank’s policies.
Certificate of Deposits
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CDs are offered by banks and do carry a higher rate of return as they are locked in for a higher period of time. CDs normally allow depositors to invest their cash in investments which ranges between three and five years, although some are even less – starting at one month or can go up to 10 years. If you have got limited time frame, the three year option is the best one but still higher the time better the yield so you can go for a five-year option. There is an option to receive interest on CDs on monthly basis but there are persons who wait for their CDs to mature and cash in on the amassed interest at the end.
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Municipal Bonds are clearly risker bonds than any other bonds but it certainly yields higher returns. These Bonds are issued by municipal, state or government agencies. These bonds have potential to provide interest rate at higher value but the major drawback here is that as the interest rate increases the value of bond decreases. Still if bonds are held till maturity the can giver higher returns along with the principal amount. As a bonus, municipal bonds are often exempt from interest tax.
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Promotional Deals is new and somewhat unorthodox short term investment strategy which helps in earning money fast taking the advantage of promotional and cashback deals.
Money Market Accounts
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These accounts allow investors to invest their money, earn a higher interest rate than a savings account, and protect their money. Money market accounts act in a similar way to regular accounts in that you can often write checks or use a debit card for your account although there is limitation about how many times you can use these facilities.
Thus just because you have limited time period doesn’t mean you are not able to get desired returns. It just needs good research work and investment in new areas and decent returns are all yours.