What is short term investment?

A certain amount of money that is invested for a particular time period is known as a short term investment. If we talk about the ground realities, then, it’s not a hidden fact from anyone that majority of the saving accounts and other such schemes are not a very good idea where you can keep your money no matter how much small or big is the amount. These saving accounts are not recommended by most of the financial advisers primarily due to their interest rates that are extremely low and in most cases just keep your money for longer period of time without adding much profit to it in return.

Therefore, keeping in mind the above mentioned scenario, smart investors usually prefer and go for short term investments and consider them as a far better way to earn handsome profit out of your money within a short period of time. In the present day world, there are some amazing low risk options which people use in comparison to saving accounts.

Two most commons ways that you can also use in case you are interested in short term investments are given as under:

a. Money Market Accounts are offered by almost all the financial institutions as well as banks these days throughout the United Kingdom. Under this short term investment scheme, they keep the client’s money relatively liquid for easy access however gives him/her a higher return rate on client’s major investment. They usually inform the client right in the beginning that he/she will have to keep the money in the said account for so and so period of time and before that it can’t be deposited out.

b. Bond Funds is another type of short term investment which is highly famous these days. In this sort of investment, the yield is quite higher in comparison to the Money Market Account and so is the risk as well. Bond fund is basically a short term mutual fund which is dealt only in bonds always.

Expecting to become a millionaire via short term investments would be a foolish thought however it can surely add to your portfolio quite nicely.

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