Best Short-Term Investments.
If you want to go for a short-term investment, you must be looking for a safe place to invest your money. Due to coronavirus, the market is wobblier than ever.
You all want to make sure that you have cash in your hand when you need it.
So, short term investment is the chariest way to invest your money.
What does short-term investment mean?
Short-term investment is generally made when someone wants money in hand at a particular time. When you invest for less than three years, it comes under Short-term investment. However, you might sacrifice a higher return for having safety for your money.
If you want to make a long-term investment like a minimum of three to five years, the stock market is the best operation. Annually the stock market goes high, up to 10%. But it is more volatile. As the stock market fluctuates, long-time investment helps you deal with the market’s ups and downs.
Best short-term investments
If you choose to invest for a short time, you won’t get enough profit compared to long-term investment. You won’t get the opportunity to do all types of investment. Well, less profit can provide you the maximum safety.
Well, Short-term investment has its benefits. As they are typically liquid, you can get your cash anytime. Moreover, it’s less risky than long-term investment.
List of the best platform for Short-term investment
Investment in money market accounts
It is another kind of bank deposit. However, it gives you a higher interest rate as compared to a savings account. Also, a savings account demands a high minimum investment.
Risk: Make sure you invest in FDIC insured money market account, so the account will get safety from losing money. Per depositor, get the security of $25,000. However, in a money market account, the risk developed over time. The low interest in the money market account makes it difficult for investors to keep up with inflation.
Fungibility: These types of accounts are incredibly liquid.
Corporate Bonds Fund
The significant corporation issues corporate bonds to fund their investments. This type of investment is safe and also pay interests regularly, like- twice a year. The low performing bond won’t affect your regular payment of interest due to the diversity of bonds.
Risk: The government does not provide safety to short-term corporate bonds, so there are chances of losing money.
Fungibility: You can buy and sell the corporate bond anytime. They are incredibly liquid.
Savings Account in Bank
Savings account in the bank is the best option to hold cash. Bank pays interest in your savings account regularly. It’s better to compare the offered interest rate by different banks.
Risk: The investors who hold their money for a long time can face trouble in keeping up with inflation. FDIC’s saving accounts are insured at banks and by NCUA at credit unions; there is no risk of losing money.
Fungibility: You can invest your money in a savings account; they are liquid. Keep the record of the maintenance fees that the bank is charging for an account or ATM access.
Investment in US-government bond funds
The government bonds are more of like corporate bonds, but the US government issues them. Government purchases bond investments like T-bills, T-bonds, and mortgage-backed security from government-sponsored franchises such as Fannie Mae.
Risk: As the government bonds are by the US government, there is full faith
and no risk.
Fungibility: As a government bond is a vast trade asset, they are highly
fungible. You can buy and sell them anytime when the stock market is open.
Investment in Treasury’s
Three varieties of Treasury’s are – T-bills, T-bonds, and T-notes. They offer a safe yield backed by the AAA credit rating of the US federal government. Instead of buying a government fund, you can go for the specific securities as per your requirement.
Why should one make a short-term investment?
Short-term investment is considered profitable than a long-term investment, especially in the stock market. Long-term investment (stock market) is subjected to market position and can get fluctuate with time. While Short investment can get you decent profits for your investment. Moreover, you can make short term investment anytime, as it doesn’t require a massive investment.
Short-term investment is safer than any other investment if you want money in hand at a particular time. Several investment platforms can provide you outstanding offers on a short-term investment.