6 Best Short Term Investment Plans with High Returns
Need a short term investment plan for 1 week to 3 years in India? There are many options available known to offer 6-12% returns in a short span of investment with strategic planning and without locking cash long-term.
Last year, the demand for short term investments with high returns grew by 40%, with over 70% of urban investors choosing tenures under 12 months.
While fixed deposits offer 3%–7.5%, alternatives like short term lending investments, P2P platforms, and debt funds deliver 9%–12% annualized returns.
If you are wondering where to invest money for short term, you are in the right place.
Below are 6 niche short term investment strategies, ranked by liquidity windows and post-tax yields.
Ultimate List of the Best Short Term Investment Plans with High Returns
1. Liquid Mutual Funds and Money Market Funds (1–90 Days)
For investors looking for a one day return investment or short-term investment plans for 3 months, liquid mutual funds are a fantastic option. These funds offer instant access to cash by investing in short-term investment instruments like treasury bills and commercial papers.
Returns & Liquidity:
- Annualized returns of 6.5%–7.5%
- Redemption within 24 hours (T+1 settlement)
- Tenure ranges from 1 day to 3 months
Risks & Taxation:
- Minimal credit risk
- Gains taxed as per your income slab
Example: Investing ₹1 lakh in Nippon India Liquid Fund would have generated ₹7,000 over the last year, with instant investment returns when needed. Ideal for short time investment plans, emergency funds, or short-term savings.
2. Debt Mutual Funds (Ultra-Short, Low Duration, Short Duration Funds) (3–12 Months)
If you are planning an investment for 3 months to 12 months, debt mutual funds can be a solid choice. These funds pool money to invest in bonds and money market instruments, offering better returns than FDs while maintaining liquidity.
Returns & Liquidity:
- Annualized returns between 7%–10.5%
- Redemption in 1–2 days
- Tenures vary from 3 month investment options to a year
Risks & Taxation:
- Slight credit and interest rate risk
- Fully taxed gains if held for less than 3 years
Example: Aditya Birla Sun Life Short Term Fund consistently delivered attractive returns above 10%, making it a top choice for investment options for short term gains.
3. Peer-to-Peer (P2P) Lending Platforms (3–24 Months)
P2P lending platforms offer some of the best short term investment options by connecting lenders directly with borrowers.
Most platforms allow you to choose short-term investment plans for 3 months, diversifying across different borrowers for stability.
Returns & Liquidity:
- 10%–14% annualized returns
- Tenure starts at 3 months; early exit options may reduce returns
Risks & Taxation:
- Default risks exist but can be mitigated through diversification
- Income taxed as per your slab rate under income from other sources.
Example: Investing ₹50,000 across 100 borrowers on platforms like LenDenClub could yield ₹5,500–₹7,000 annually. This makes it one of the best high return short term investment plans in India.
4. Corporate Fixed Deposits and Non-Convertible Debentures (6–36 Months)
If you are searching for a 2-year investment plan or short-term investment options with high returns, corporate FDs and NCDs are worth considering. These instruments provide higher interest rates than bank FDs.
Returns & Liquidity:
- Interest rates between 7.5%–9.5% per annum
- Tenures from 6 months to 3 years
Risks & Taxation:
- Limited liquidity before maturity (though NCDs are tradable)
- Interest taxed as per your slab rate
Example: A Bajaj Finance FD offering 8.35% per annum could grow ₹1 lakh to ₹1,17,400 in 2 years. This short term high yield investment works best for someone seeking steady returns with moderate risk.
5. Post Office Time Deposits (1–5 Years)
For safe short term saving plans, Post Office Time Deposits are among the most reliable options.
Suitable for small investments with big returns, they guarantee government-backed security.
Returns & Liquidity:
- Current rates at 6.9% for 1-year deposits
- Premature withdrawal permitted after 6 months
Risks & Taxation:
- Virtually no risk
- Interest taxable under income tax rules
Example: With just ₹50,000 deposited for a year, you could earn up to ₹3,450, making this the best short term investment for risk-averse investors.
6. Short-Term Large Cap and Balanced Mutual Funds (3–12 Months)
If you are comfortable with moderate risk and looking for investments with quick returns, large cap and balanced mutual funds can be a profitable choice. These funds invest in blue-chip stocks and medium-risk debt instruments.
Returns & Liquidity:
- Large-cap returns of 8%–12%, balanced funds at 7%–11%
- T+2 redemption timeline
Risks & Taxation:
- Higher volatility; returns depend on market conditions
- Gains within a year taxed as short-term capital gains
Example: With SBI Bluechip Fund delivering 11.5% in the last 12 months, it presents one of the best short term investments with high returns for market-savvy individuals.
Latest Trends in Short-Term Investments
The world of short term investment plans is evolving. Recent innovations are creating both safer and higher-yield opportunities:
- AI-Powered Risk Scores: Machine learning tools predict borrower defaults for short term lending investments in advance.
- Green Bonds Surge: SBI’s 3-month eco-bonds now offer 8.9% returns, bundling short term high return investments with tax rebates under Section 80CCF.
RBI’s New P2P Safeguards: Mandatory 2% contingency reserves reduce lender risk by 40%.
FAQs about Short Term Investment Options
A high-return short-term investment plan is a financial product designed to generate above-average returns—typically above 7% per annum—within a period ranging from one day to three years, often involving instruments like debt mutual funds, corporate bonds, or select digital lending products.
Certain liquid mutual funds, money market funds, and digital investment apps allow investors to earn daily returns, with the ability to redeem funds and access returns within 24 hours, making them suitable for immediate liquidity needs.
Yes, many platforms and funds accept small investments starting from ₹100 to ₹500, enabling investors to access high-return opportunities without large initial capital.
High-return short-term investments may carry credit risk, interest rate risk, or market volatility. Diversification and reviewing credit ratings or fund portfolios can help manage these risks.
Most high-return short-term investments are taxed as per the investor’s income slab if held for less than three years, though certain instruments may offer indexation benefits or specific tax-saving features if held longer.
Comparing short-term investment plans involves reviewing annualized returns, liquidity terms, credit ratings, fund manager performance, and any associated withdrawal penalties or fees using reliable financial data sources and official fund documents.
You generally need a PAN card, Aadhaar card, and a valid bank account for KYC compliance. Some platforms may request additional documents for higher investment amounts or enhanced due diligence.
Conclusion
Whether you are planning a 1 month investment or a short term investment plan for 3 years, the key is to choose the right platforms and instruments that align with your financial goals.
The options outlined here promise high returns, low risk, and instant liquidity when executed strategically.
If you have been wondering where to invest money for quick returns, this guide provides the answers you need.
Team LenDenClub
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.