Short-Term Investment: Looking to invest your money for just one year? These 5 investment options can give you better returns..

In the world of investing, one piece of advice is always given: you should invest your money keeping both short-term and long-term goals in mind. The reason is simple. When you suddenly need money, you won't be forced to break your long-term investments. In such situations, short-term investments come in very handy.

If you also want to invest money for just one year or less and want a safe investment with decent returns, then there are several options available in the market. Here, we are telling you about 5 such short-term investment options that have the potential to give better returns in a short period.

1. Recurring Deposit (RD)

If you cannot invest a large sum of money at once and want to save a little money every month, then a Recurring Deposit is the right option for you. An RD works just like a piggy bank, where a fixed amount has to be deposited every month.

Upon maturity, you receive the total deposited amount along with interest. You can open an RD for 1 year or more. This facility is available in almost all banks. Before investing, be sure to compare the interest rates of different banks.

2. Bank Fixed Deposit (FD)
For those who want to invest a lump sum, a bank FD is considered the most reliable option. You can open an FD in any bank for a period ranging from 7 days to 10 years. If you want to invest for the short term, a 1-year FD can be a good option.

The post office also offers FD facilities for 1 to 5 years. Before opening an FD, be sure to compare the interest rates of both banks and the post office to get better returns.

3. Debt Mutual Fund
If you want to invest for 12 months and want slightly better returns than an FD, then a debt mutual fund can be an option. In debt funds, money is invested in safe instruments such as government bonds and debt securities.

These funds usually have a fixed maturity period. The risk is lower, and the returns can be slightly better than FDs, although this is not entirely guaranteed.

4. SIP (Systematic Investment Plan)
SIPs can also be started for the short term. In this, you can invest a fixed amount every month according to your convenience. The SIP can be stopped and the money withdrawn at any time if needed.

SIPs are linked to the market, so there is a risk involved. Experts estimate an average return of 12%, but there is no guarantee of returns. Therefore, invest in SIPs only after understanding the risks. Experts usually recommend long-term SIPs.

5. Corporate Fixed Deposit
Corporate FDs are also a good option for depositing a lump sum amount. Many large companies issue corporate FDs to raise money for their businesses. They work similarly to bank FDs, but the interest rates are usually higher.

The risk in corporate FDs is slightly higher than in bank FDs. However, if you choose an FD from a strong company with a good rating, the risk is significantly reduced. Typically, interest rates of 8% to 10% can be offered for a period of 1 to 5 years.

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