Short Term Investment

Savings bank account
Use only for short-term (less than 30 days) surpluses
Often the first banking product people use, savings accounts offer low interest (4%-5% p.a.), making them only marginally better than safe deposit lockers.



Money market funds
Offer better returns than savings account without compromising liquidity
Money market funds are a specialized form of mutual funds that invest in extremely short-term fixed income instruments. 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 better returns than savings accounts, but lower than bank fixed deposits. With the flexibility to issue cheques from a money market fund account now available, explore this option before putting your money in a savings account

Bank fixed deposits
For investors with low risk appetite, best for 6-12 months investment period
Also referred to as term deposits, this product would be offered by all banks. Minimum investment period for bank FDs is 30 days.

The ideal investment time for bank FDs is 6 to 12 months as normally interest on bank less than 6 months bank FDs is likely to be lower than money market fund returns.

It is important to plan your investment time frame while investing in this instrument because early withdrawals typically carry a penalty.