We often have some money left after meeting all our expenses. This money is the savings that we have. It is very important to invest this money further to make your money work for you. If you don’t invest your money and rather keep it as it is, the value keeps decreasing with time as inflation eats in to your money. The investment options can be chosen depending on the risk appetite, the time frame for which the money is available and the investment goal of an individual.
Short term investments options are bank fixed deposits/ recurring deposits, mutual funds, company deposits/ NCD’s and investment in gold. The bank fixed deposits is considered to be the safest but offers the least return. On an average a bank fixed deposit of one year fetches an interest of 9% per annum. Mutual fund investment can further be subdivided in to investment in to debt, equity or in to a sector.