What are various Short-term financial options available for investment?

What are various Short-term financial options available for

investment?

Broadly speaking, savings bank account, money market/liquid funds and

fixed deposits with banks may be considered as short-term financial

investment options:

Savings Bank Account

use, which offers low interest (4%-5% p.a.), making them only

marginally better than fixed deposits.

is often the first banking product people

Money Market or Liquid Funds

funds that invest in extremely short-term fixed income instruments

and thereby provide easy liquidity. Unlike most mutual funds, money

market funds are primarily oriented towards protecting your capital

and then, aim to maximise returns. Money market funds usually yield

are a specialized form of mutual

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better returns than savings accounts, but lower than bank fixed

deposits.

Fixed Deposits with Banks

and minimum investment period for bank FDs is 30 days. Fixed

Deposits with banks are for investors with low risk appetite, and may

be considered for 6-12 months investment period as normally

interest on less than 6 months bank FDs is likely to be lower than

money market fund returns.

are also referred to as term deposits