I want to invest Rs 50,000 for the short-term (three to six months) as I will need the money after six months for my child's admission. Would appreciate it if you please suggest investment options (share/mutual funds/securities) where I can get a guaranteed best return and can withdraw anytime. Thanks in advance. - Santosh Kumar Ghosh
When investing for such a short horizon and a goal which is non-negotiable, the main objective should be safety and preservation of capital rather than earning higher returns.
- Considering the same, you can continue to keep the money in your savings bank account or park it in a fixed deposit. Although the returns will be slightly less, they will be guaranteed. More importantly, your capital would be safe as it would be required in a very short time and for a purpose which cannot be compromised or delayed further.
Deposits in a bank are insured up to Rs 5 lakh by Deposit Insurance and Credit Guarantee Corporation. It's a subsidiary of the Reserve Bank of India (RBI) that protects the interest of investors.
- The other option could be to park your money in a good liquid fund. These are debt mutual funds that invest in treasury bills, government securities, repo certificates and other such securities having a maturity period of not more than 91 days.
Liquid funds have the potential to give higher returns than a bank deposit and are reasonably safe. However, they do not guarantee the preservation of capital as in the case of a bank deposit.
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