Short Term Investment options for high returns

Short Term Investment options for high returns

How exactly can you do short term investment to get high returns?

Your wedding, your first home, or your first car might be two years away. But if you don’t start putting the money together now, those 2 years may turn into 5 or 10 or 15.Your go-to option might be a regular savings bank account but the returns these instruments offer are lower than most others, with the primary benefit being only safety.Short-term investments are designed to provide considerable returns in a short period of time, which could be a few months or even a year. If you’re going to get married in the next two years, you’re definitely not interested in waiting forever for your money to multiply.

Here are six great short-term investment options from the vast sea of investments that you need to look:

1. Bank fixed deposits

Bank fixed deposits are secure investments, and you can park your money in a fixed deposit anywhere from 30 days to 10 years. While you have the option to withdraw the money before the maturity date it’s advisable to withdraw it only after because this instrument is not very liquid in nature.

2. Savings account

If you hate risks and you’re okay with less-than-substantial returns but need high liquidity, then consider opening a savings bank account. Different banks offer different interest rates, so that’s something you might want to keep in mind.

3. Money market accounts

Popularly known as liquid funds, money market accounts are a special category of mutual funds, which invest in several money market instruments such as term deposits, commercial papers, etc.

4. Gold or silver

Have you noticed your parents love to buy gold during Diwali? Gold and silver are considered great investments for both the long term and the short term. If you are on the lookout for an uncomplicated and hassle-free way to earn returns, then this is the option for you.

5. Short term debt funds

Short-term debt funds are managed conservatively with the sole aim of securing capital and providing good returns without the fear of market volatility. However, debt funds are complicated and if you really want to make money you need to understand how they work. If you wish to invest for more than a year, debt funds are more tax-efficient than bank fixed deposits.

6. Large cap mutual funds

Large cap mutual funds invest in equity or stocks of large companies to achieve good growth in a short period of time. For quick and smart returns within one to three years look at these mutual funds.

To know more about 6 Short Term Investment

Policy Loan | Loan against Insurance policies is a good option

Loan against insurance policies is a good option

Loan against insurance policies is a good option in case funds are required in an emergency situation and can be a better alternative to a personal loan or a credit card loan or asking friends/relatives for financial help. But are they always a good idea?

How to obtain a loan against policy

You’ll have to visit the branch of your preferred insurance company and fill the standardised application form for a loan.

In the form, you’ll be asked to assign the policy absolutely in favour of the insurer. This essentially means that in case of a claim/maturity benefit due, the insurer will have the first right over the money and will repay you after deducting the outstanding loan principal and interest. Since nowadays insurers have stopped issuing cheques, you’ll have to also provide a cancelled cheque of the bank account in which you want the loan amount to be credited by the insurer and sign a receipt for the same.

Is a loan available for all insurance policies?

As per IRDA’s guidelines on Linked Insurance products, Unit Linked Insurance Plans can no longer offer a policy loan. So, as on date, this feature is generally available only for traditional non-linked endowment based policies wherein after you pay premium for a certain number of years (usually three), the policy acquires a surrender value. The loan amount is a percentage of that surrender value (usually around 60- 80%).

Hence, if you are contemplating a loan against insurance policy, you need to first check whether your policy is eligible for a loan or not. For this, you can read the fine print but the better option is to visit the branch to know the surrender value of the policy and how much loan can be obtained against it.

Apart from getting a loan, this feature can also enable the policy to serve as collateral for some other loan. E.g. imagine a situation wherein you are purchasing a flat and need a fixed amount for the down-payment but are falling short by a couple of lacs. In such a case, you can assign the policy to the bank or Non-Banking Financial Company (NBFC) providing the home loan.

To know more about Policy Loan there are blog where you can get information