Many investors wish to invest in a plan for only one year as they want to maintain the liquidity of funds. The need for liquid money can arise anytime without notice. So, if you are the one who belongs to this category of investor, we have some of the best investment options for 1 year. Here is a list of the best investment plans for 1 year that you can look up before making any investment decision.
Top 5 Investment Options For 1 Year
Debt Funds
A debt fund is the best one year investment plan for traders who are risk-averse and need everyday profits. Debt funds are stable and less risky than equity funds. In debt funds, the market fall of price doesn't always lead to a sharp dip in your investment returns.
Debt funds have excessive liquidity and money can be redeemed in less time. Gains from these funds are taxed after 36 months, so you are free from tax as you are looking for a 1-year investment plan.
Fixed Deposit
One of the secured ways to invest for 1 year is a fixed deposit. The depositor has even insured up to Rs 1 lakh in the financial institution. The tenure of fixed deposits can vary based on your choice. The deposit can also be renewed after maturity and then the amount can be reinvested. You can opt for a fixed deposit if you wish to have a secured investment plan.
Fixed Maturity Plans
Another best investment plan for 1 year is a fixed maturity plan. Fixed maturity plans have a minimum lock-in maturity period. You can take any fixed maturity plan whose maturity period is 1 year. The main objective of fixed maturity plans is to offer consistent returns even after the rigid maturity period. But the returns are not fixed and assured. These plans have low liquidity and are taxed like debt price ranges. If you want to invest in these types of funds, go for it.
The funds are highly liquid as there is no foundation on them. Returns of arbitrage mutual funds are around 6 percent per annum but that is not constant and sure. So, if these features suit you, invest in arbitrage mutual funds.
Arbitrage Mutual Fund
When it comes to arbitrage mutual funds, the fund managers invest in arbitrage possibilities that are inside the coin and derivative segments. There is no fixed tenure of arbitrage mutual funds so you can maintain them as long as you wish to. But it is traditionally advised to keep them for at least 365 days.
Recurring Deposits
A recurring deposit is the best investment plan for 1 year as you will not be burdened with paying a huge sum for investment in one go. It implies that you need to make investments at regular set intervals for a set period. After the maturity of the deposit, you will receive a lump sum maturity amount. You can make recurring deposits online through your bank. Recurring deposits offer returns similar to fixed deposits.
Returns on recurring deposits are similar to ordinary deposits and that is around 6.5 percent currently. Recurring deposits are a great way to save money every month and earn a return on them. You should surely try this short-term deposit to invest.
Conclusion
Investment is the need of the hour but having money in hands for emergencies or expenses is also important. In this case, having an investment plan for 1 year is the best option for you. So, you can invest some of your money in any monthly investment plan for 1 year based on your preference. You can enjoy the benefits of investing along with the freedom of liquidity. Happy investing!
Disclaimer:
*Tax benefits are as per the Income Tax Act, 1961, and are subject to any amendments made thereto from time to time The article is meant to be general and informative in nature and should not be construed as solicitation material. Please read the related product brochures for exclusions, terms and conditions, warranties, etc. carefully before concluding a sale. Make responsible financial decisions. Consult with your financial advisor before making any decisions on insurance purchase.
The U.S. stock market is considered to offer the highest investment returns over time. Higher returns, however, come with higher risk. Stock prices typically are more volatile than bond prices. Stock prices over shorter time periods are more volatile than stock prices over longer time periods.
Most investors would view an average annual rate of return of 10% or more as a good ROI for long-term investments in the stock market. However, keep in mind that this is an average. Some years will deliver lower returns -- perhaps even negative returns. Other years will generate significantly higher returns.
While the stock market as a whole often returns 8% in a year, it's impossible to know ahead of time which year will generate that return. You could look at preferred shares and select those whose current yield is above 8%: Sort Preferred Stocks Alphabetically . You could look at junk bonds as well.
Long-term certificates of deposit. Overview: Certificates of deposit, or CDs, are issued by banks and generally offer a higher interest rate than savings accounts. And long-term CDs may be better options when you expect rates to fall, allowing you to keep your money earning higher rates for years. Who are they good for ...
Indeed, a good mix of equities (yes, even at age 70), bonds and cash can help you achieve long-term success, pros say. One rough rule of thumb is that the percentage of your money invested in stocks should equal 110 minus your age, which in your case would be 40%. The rest should be in bonds and cash.
CDs, high-yield savings accounts, and money market funds are the best places to keep your cash when it comes to interest rates. Treasury bills currently offer attractive yields at the lowest risk.
A stock portfolio focused on dividends can generate $1,000 per month or more in perpetual passive income, Mircea Iosif wrote on Medium. “For example, at a 4% dividend yield, you would need a portfolio worth $300,000.
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