In simple terms, short term investments are savings put aside for use in the nearest future, that is usually five years or less.  Similar to any other form of investment, the objective is to earn interest on your invested money

Short term investment schemes are perfect for meeting your immediate goals and most of these are perceived as less risky, unlike long-term investments. Contrary to popular belief, investment in stock market is not the only means of short term investment, though it’s an important one.

Here are five short term investment schemes with best yields. You need to invest in all of them, but pick the one that suits you the most.

Also Read: How to become Stock Market Millionaire in 5 Years?

Peer-To-Peer Lending

This is, without doubt, one of the most lucrative and flexible investments schemes proven to give substantial results in as little as a year or even months.

Here, willing investors and potential customers are introduced in a convenient and secure manner by companies through their websites. Investors then provide a certain amount as loan and after a specified period of time, receive their rewards, both in the form of repayment and also interest.

Another advantage of this system is that the amount given out as a loan by the investor is solely dependent on how much the investor is willing to risk to make the best gains.

Interest rates on the loans given out are set by the companies that act as “middlemen” and as loans are given out based on very strict criteria, the chances of an investor dealing with losses are quite low.

The most reputable companies involved in this form of investment include Lending Club, Funding Circle, Prosper Marketplace amongst others.

Online Recurring Deposit Account

This form of short-term investment has become a popular choice due to its simplicity and flexible mode of operation.

For one, investors can confidently put aside funds in the bank without worrying about losses of any kind as this is a risk-free venture. Also, you need to invest lump-sum money at once, as the investment is evenly distributed month by month. Regarding liquidity, few banks have a higher lock-in period, but more the lock-in period more is the interest offered. So, it’s kind of a win-win situation for both banks and investors

Money Market Accounts

This is another notable investment plan that works significantly well on a short-term basis to produce great benefits for your investments.

An attractive feature here is that interests are determined based on your bank account status, and the investment period does not matter.

Another good thing is that the invested money can be moved or withdrawn completely whenever the investor deems it fit, without attracting a loss on account of that.

Stock Market Investment

Unarguably this is best forms of investment if you want to multiply your money in a short term. Though there are market risks involved, but if you do it carefully with proper risk management, you can definitely witness great results.

There are multiple options available like Equity, Derivatives, and Forex to invest on. This is a highly liquid form of investment as you can literally withdraw your money on the same day of investment. A little conservative approach would be to invest in markets through mutual funds. Although the rate of return decreases but it limits your risk as your investment is handled securely by professionals.

Short-Term Bond Funds

This is an excellent scheme that brings in income through investments made in fixed income instruments.

Although it is known for its unstable and unpredictable nature due to fluctuations in the market, Short-Term Bond Funds is still an investment plan that yields some of the best returns for short-term investors.

These investments usually mature after about two years at most and setting up a Demat account is a necessity to run this sort of investment.

Also Read: Power of Compounding in Investments

In conclusion, it is necessary to emphasize that each short term investment option has its own fair share of pros and cons. It is best to weigh them properly to determine which investment plans suit your own personal needs, goals, and objectives. But all of these definitely offer great yields and if properly practiced can make you rich in no time.