Personal Finance Corner: 5 Investment Options for Less Than 1 Year in 2023

The typical household saves for short-term needs, i.e., up to one year. However, there is confusion about the risk-return ratio of its investment. Here we are telling you the merits and demerits of five short-term investment options that can give stable returns.

Personal Finance Corner: 5 Investment Options for Less Than 1 Year in 2023

5 Investment Options for Less Than 1 Year in 2023

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Tenure of Bank FD Investment:

Liquidity up to 7 days, 14 days, 30 days, 45 days, 1 year, or 10 years: Most banks do not allow the breaking of FDs before maturity. Returns between 3%-8%. Tax: TDS as per slab on interest above Rs 10,000 in a year

Tenure of Company FD Investment:

1 to 5 years. Liquidity: FD can be broken before maturity. Returns: 7-8.25% Tax: TDS as per slab on income above 5,000 in 1 year

Post Office Time Deposits:

Investment tenure: 1, 2, 3, and 5 years Liquidity: Cannot be withdrawn for 6 months from the date of FD. Returns: 6.9% per annum. According to the tax slab.

Recurring Deposit:

Investment period: 6, 9, or 12 months Liquidity: premature withdrawal facility, but it depends on the bank. Returns: Up to 2.75–8% per annum. Tax: Like bank FD.

Debt mutual funds:

Investment period: maximum 12 months. Liquidity: These have more liquidity. Investors can withdraw money at any time. Returns: Up to 7–13% per annum. Tax: 20% with an indexation benefit if the holding period is more than three years.

Here are some additional things to keep in mind when choosing an investment option for less than 1 year:

  • The interest rate offered by the investment.
  • The liquidity of the investment means how easily you can access your money.
  • The risk of the investment.
  • Your financial goals.
  • Your time horizon.
These are the 5 investment options for less than 1 year in 2023 in India. You can select an investment option that is suitable for you and your financial requirements by taking these things into account.

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