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Investing for Six Months

When investing for short term, be mindful of safety of capital and liquidity

I want to invest Rs 2 lakh for a period of 6 months. I am looking for about 11 per cent returns and want the money to be accessible at all times. Where should I invest?

Unfortunately, with the kind of safety you are looking for, it may not be possible to achieve 11 per cent returns. You will have to settle for lesser returns. Consider a liquid fund, also called ultra short-term bond fund, as it fulfills all your criterias except for the 11 per cent return. Liquid funds invest in debt papers with maturity of up to 61 days while the average maturity of ultra short term funds go up to one year.

You just might get lucky with 8-9 per cent and the money will be on call anytime and it will be reasonably safe.

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