Best Short Term Investment Plans With High Returns in 2024

best short term investment plan

Nowadays, more and more people are looking into short-term investments as a way to manage, invest, and save their funds. But what exactly is a short-term investment, and why should you consider it? 

In simple words, short-term investment plans require you to put your money into financial investment products that don’t take too long to mature, unlike long-term investment plans that focus on growing wealth over time.

These investment options offer flexibility, liquidity, and accessibility, making them a good fit for those with immediate financial goals or those wanting to seize market opportunities. 

Now the question is, which is the best short-term investment plan?

Not to worry; in this blog, we’ll discuss the best investment plans in India for the short term.

Let’s dive in!

List of Best Short-Term Investment Plans with high returns

If you’re seeking secure ways to invest your money for steady, risk-free growth, several of the best investment plans in India for the short term offer a balance between safety and returns. Here are some of the top choices:

Investment Option

Average Returns (in %)

Large Cap Mutual Funds


P2P Lending


Debt Instrument


Post-Office Time Deposits


Corporate Deposits


Bank Fixed Deposits


Recurring Deposits


Money Market Account


Savings Account


1. Large Cap Mutual Funds

Investing in a Large Cap Mutual Fund essentially means purchasing a share of ownership in a diverse portfolio comprising well-established and financially stable companies with significant market capitalisation.

Investors typically commit their funds for a tenure ranging from 1 to 3 years, with options available for longer durations, such as 3-5 years. 

These funds provide a combination of high liquidity and the potential for substantial returns, making them an attractive choice. Investors can expect returns ranging from 8% to 13%.

2. P2P Lending

P2P lending offers flexible tenure options, allowing lenders to choose loan terms that suit their preferences. Typically, tenures range from a 3 months to   5 years, giving lenders the freedom to select the duration that aligns with their investment goals and risk tolerance.

P2P lending offers attractive returns compared to traditional investment options like savings accounts or fixed deposits. Investors can earn returns in the form of interest income generated from the loans they fund. The exact returns vary depending on factors such as the borrower’s creditworthiness, loan term, and interest rate. However, P2P lending platforms typically provide up to 10-12% returns. 

Interest income from P2P lending falls under the category of ‘Income from Other Sources’ and is taxed according to your current tax slab, similar to interest earned from savings accounts or fixed deposits. No TDS (Tax Deducted at Source) is deducted when you withdraw your funds or receive interest payments 

3. Debt Instrument

Investing in Debt Instruments is an attractive option for those seeking low-risk, short-term opportunities. Debt mutual funds are financial assets that provide stability and consistent returns without the market’s ups and downs.

Returns can reach up to 10.5%, making them particularly appealing for risk-averse individuals. These funds come with different tenures:

  • Ultra-short-duration fund: Spanning 3 to 6 months.
  • Low duration fund: Ranging from 6 to 12 months.
  • Liquid fund: Maturity extends up to 91 days.

Notably, debt funds offer high liquidity with a maturity period capped at 91 days. The interest rate typically ranges from 7-9%, making them a reliable choice for short-term investments.

4. Post-Office Time Deposits

Post-Office Time Deposits is one of the safest and most reliable short-term investment plans. This scheme is facilitated by India Post and holds particular popularity all across India, providing guaranteed returns.

Investors can opt for tenures of 1, 2, 3, or 5 years. In terms of liquidity, the interest in a post office scheme is calculated annually. 

The returns from a Post Office Time Deposit account amount to 6.9% approximately for a one-year term. However, premature withdrawals are not permitted before the completion of 6 months.

5. Corporate Deposits

Corporate Deposits, also called company fixed deposits, offer fixed-term investment options with predetermined interest rates. This investment option ensures guaranteed returns and tenure flexibility. 

Unlike conventional bank deposits, these are provided by non-banking financial companies (NBFCs) and other financial institutions. 

This short-term investment plan presents attractive interest rates varying between 9% to 12%, making it a compelling choice for investors seeking higher returns.

6. Bank Fixed Deposits

Bank Fixed Deposits (FDs) involve depositing a lump sum in a bank for a fixed period at a fixed interest rate. This results in the return of the principal amount along with compounded interest at the end of the tenure. 

FDs are recognised as one of the safest short-term investment choices and are also known as term deposits. The tenure for FDs spans up to 10 years, with the option for renewal upon maturity. It provides both high liquidity and a strategy to manage reinvestment risk. 

With interest rates currently ranging from 3% to 9%, FDs present a stable option unaffected by market volatility, though they are subject to high-income tax rates, reaching up to 30%.

7. Recurring Deposits

A Recurring Deposit is another form of term deposit available in Indian banks and Post Offices. This short-term investment scheme allows investors to deposit a fixed amount every month, earning interest at rates applicable to fixed deposits. 

Recurring deposit accounts have terms as short as six months and as long as ten years, which can be extended in increments of three months. However, closing the account premature of the lock-in period results in the repayment of only the principal amount with no interest.

Returns from recurring deposits are similar to those of Bank Fixed Deposits. Presently, for tenures of 12 months and beyond, interest rates range from 3.25% to 7.50% per annum, calculated from the date of the first deposit. 

8. Money Market Account

Money Market Accounts, also called liquid funds, are a secure way to invest money with decent short-term returns. They are similar to savings accounts but offer higher interest rates. 

Money market accounts, which are generally provided by banks and other financial institutions, have a 91-day maturity limit, no lock-in period, great liquidity, and minimal risk. They typically don’t last longer than 13 months, providing flexibility for immediate objectives.

Returns, currently around 3.35% per annum, are not guaranteed or fixed. 

Money market account gains are included in an individual’s income and subject to appropriate taxation. After indexation, the tax rate on profits on investments held for more than 36 months is 20%.

9. Savings Account

A Savings Account is a basic bank account used for managing everyday finances and saving money. It typically offers low but stable interest rates, usually around 3-4%. 

The main benefits of a Savings Account are its accessibility and safety. It’s also a convenient way to save up small amounts of money over time.

However, the downside is that the returns are limited and are lower compared to other investment options. This means your money might not grow as much over time compared to investing in other money-growing schemes.

Final Words

If you’re considering putting your hands on short-term investment plans, then the above-mentioned options offer promising returns that encourage you to think and plan well and invest. 

Whether you prioritise the flexibility of savings accounts, the stability of the fixed returns of corporate deposits, or the accessibility of money market accounts, each investment option caters to unique individual financial preferences. 

So, take a moment to evaluate your goals, risk appetite, and expected returns before starting your investment journey. If you need more guidance, don’t shy away from taking help from a reputable financial advisor.

Frequently Asked Questions

1. How do short-term investment plans work?

Short-term investment plans, whether for individuals or companies, aim to protect capital while generating attractive returns. These plans navigate market changes, address immediate needs, and seize opportunities, ensuring a secure and fruitful financial approach.

2. What are some of the best short-term investment plans?

Some of the best short-term investment plans include Bank Fixed Deposits, Money Market Accounts, Recurring Deposits, Post-Office Time Deposits, Large Cap Mutual Funds, and Debt Instruments. Each option offers a unique blend of safety, liquidity, and potential returns, catering to various financial goals and risk tolerances.

3. What is the time span of a short-term investment plan?

The time span of a short-term investment plan typically ranges from a few months to a few years. It’s a flexible investment category, and the specific duration can vary based on individual preferences, financial goals, and the nature of the product.

LenDenClub is India’s largest alternate investment platform which started operations in India in 2015. We have been helping investors diversify their investments beyond traditional investment instruments ever since.

LenDenClub is India’s largest alternate investment platform which started operations in India in 2015. We have been helping lenders diversify their investments beyond traditional investment instruments ever since.



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*This is an annualized yield and is subject to the maximum FMPP tenure, which is 5 years. P2P lending is subject to high risk and may cause an entire loss of principal.

*P2P lending is subject to risks. And lending decisions taken by a lender on the basis of this information are at the discretion of the lender, and LenDenClub does not guarantee that the loan amount will be recovered from the borrower.

** Average value mentioned is the weighted average of simple interest received by lenders

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