Best Short-Term Investment Plans with High Returns in India (2025)

If you’re looking for high returns with a short-term investment horizon (1-3 years), here are the best options:

1. Fixed Deposits (FDs) in Small Finance Banks 🏦

• Returns: 7%-9% per annum

• Tenure: 6 months to 3 years

• Risk: Very Low (Up to ₹5 lakh insured by DICGC)

• Best for: Safe & predictable returns

2. Debt Mutual Funds 📊

• Types: Short-duration, Ultra Short-term & Liquid Funds

• Returns: 6%-8% per annum

• Risk: Low (depends on fund type)

• Lock-in: No lock-in (ideal for 1-3 years)

• Best for: Higher returns than FDs with liquidity

3. Corporate Fixed Deposits 🏢

• Returns: 8%-10% per annum

• Tenure: 1-3 years

• Risk: Medium (check company rating – AAA-rated are safest)

• Best for: Fixed returns with better interest than banks

4. Recurring Deposits (RDs) 💰

• Returns: 6%-7% per annum

• Tenure: 6 months to 3 years

• Risk: Very Low (offered by banks & post offices)

• Best for: Disciplined savings with guaranteed returns

5. Post Office Time Deposit (POTD) 📬

• Returns: 6.9%-7.5% per annum

• Tenure: 1-3 years

• Risk: Zero (Government-backed)

• Best for: Safe investment with fixed returns

6. Short-Term Bond Funds 🏛

• Returns: 7%-9% per annum

• Tenure: 6 months to 3 years

• Risk: Low (lower risk than equity funds)

• Best for: Parking funds with better returns than FDs

7. Ultra Short-Term & Liquid Mutual Funds 💸

• Returns: 5%-7% per annum

• Tenure: 3 months to 1 year

• Risk: Very Low (invests in treasury bills & bonds)

• Best for: Emergency funds & quick withdrawals

8. Arbitrage Mutual Funds 🔄

• Returns: 6%-8% per annum

• Tenure: 1 year (for tax efficiency)

• Risk: Low (less volatile than equity funds)

• Best for: Safe, tax-efficient short-term investment

9. Sovereign Gold Bonds (SGBs) – Short Holding 🏆

• Returns: Gold price appreciation + 2.5% fixed interest

• Tenure: 8 years (but can exit after 5 years)

• Risk: Medium (gold price fluctuations)

• Best for: Hedge against inflation with safe returns

10. High-Yield Savings Accounts & Sweep-In FDs 🔄

• Returns: 4%-7% per annum

• Tenure: No fixed tenure (liquid savings)

• Risk: Very Low

• Best for: Parking funds with better interest than regular savings

Best Picks Based on Your Needs

✔ For highest safety & returns: Small Finance Bank FDs, POTD
✔ For liquidity & returns: Ultra Short-Term Funds, Liquid Funds
✔ For higher-than-FD returns: Debt Mutual Funds, Corporate FDs
✔ For tax efficiency & short-term: Arbitrage Funds, SGBs