Selasa, 23 Agustus 2011


It is a general rule that the longer you invest your money, the greater the returns. There are several options which you can get if you want to invest in the long run. These options are available only if you can invest for at least 10 years and more. But what if you want money after, say 5 years? This is where short-term investments with high returns comes to play. Investing in stocks and bonds are one of the best options for short-term investment opportunities, but it comes with associated risks. However, if you are one of those who don't want to take such high risks, there are other options like high yield bank accounts, which can give you excellent returns on investments.

Short-term Investment Options with High Returns

Some of the most common short-term investments with high returns include high yield bank accounts, certificate of deposits, bond funds, corporate bonds, municipal bonds, I bonds, government bills and notes, money market funds and money market deposit accounts. Let's take a look at the advantages and disadvantages of each of them.

High Yield Bank Account
There are several banks and financial institutions which provide checking and savings account that give you a high rate of interest. Today, they have become one of the most popular short-term investment options used by people. The best part of going for high yield bank account is that you have the flexibility to deposit additional money or withdraw money from your account. You don't necessarily need to keep all your money for a specified period of time. The interest rates which you can earn is relatively higher compared to standard bank accounts.

Money Market Funds
These funds are offered by corporates wherein your money is invested in safe securities like commercial papers, government securities, certificate of deposits, etc. The best part of these funds is that whenever you want the money, you can withdraw it, or can even write a check. Moreover, the return you can get is relatively higher than money market accounts.

Certificates of Deposit
Certificates of deposit is one of the best short-term investment which give you a good return. If you go for this option, you will need to keep the money for a specified period of time, usually between 3 to 60 months. You can go to any bank and get more information on certificates of deposits and the minimum amount which you need to have. The best part is that they are a safe option and depending on how long you keep the money, they can give higher return on investment than money markets.

Government Bills and Notes
This is another good option if you want quick returns, besides being a low-risk investment option. Government bills and options are guaranteed by the government, and the best part is they mature very soon, usually between 1 to 10 years. If you go for treasury bills, the maturity period is one year, while treasury notes have a maturity period between 2 to 10 years. Moreover, you can buy them directly, without paying a commission, besides they are exempt from taxes.

Municipal Bonds
These bonds are issued by the state or local government, and they are released so as to build projects like highways, schools, etc. for the betterment of the public. Municipal bonds are an excellent option if you are looking for an income wherein you have to pay a lower amount of taxes.

Corporate bonds
Such bonds are issued by various corporations, ranging from blue chip to manufacturing companies. Usually these bonds pay more than government bonds, and can be a good option if you want to invest for short period. However, you need to remember here that more credit worthy the company is, the lesser rate of interest it would pay.

So, these were some of the options for short-term investments with high returns which you may opt for. While choosing any of these options make sure that you go through the terms and conditions of investments, so that you know the rules which you would need to follow.

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