Smartest investment and life plans in UAE
Invest smart today for a better tomorrow
Smartest investment and life plans in UAE
Investment can be divided into two main categories on the basis of tenure i.e. short-term investment plans and long-term investment plans. And the short-term investment option is an ideal option for those people who are not really interested in waiting for long years in order to get their money multiplied or people who have short-term financial goals since such type of plans is majorly focused to meet the expected near future expenditures. With the short-term investment, you can invest your hard-earned money without locking it for a long duration. Let’s just say, if you are going to get married in the next 2 years, you are certainly not so interested in waiting for long years for your money to multiply.
So, if you also have short-term financial goals and are looking for the best short term investment plan in the UAE then you are at the right place. Here we have listed down the 7 best short term investment plans.
Short-term investment plans in UAE is a type of investment plan that is designed to offer considerable returns and liquidity generally within a short span of time which usually ranges from 1 to 5 years. Such type of plans is mainly focused on meeting short-term financial goals.
Short-term investment plans also have restricted risk exposure because of their shorter maturity periods. Henceforth, short-term investment options offer an investor with high returns, low risk quotient, and high liquidity.
Being one of the top choices of the majority of the people, savings account provides high liquidity. Savings account enables you to withdraw money at anytime & anywhere in a hassle-free manner. However, banks usually offer not more than 4 to 7 percent return from a savings account.
They are basically a kind of mutual fund that invests your hard-earned money in short-term government certificates or securities of deposits. The best thing is that investors can withdraw money from these funds at any time. However, it is not advisable to put your emergency funds into liquid funds as the redemption takes around 2 or 3 business days.
The major benefit of this short-term investment plan is that it offers a high rate of interest of a maximum of 7 percent. Because the money in liquid funds is invested in money market instruments so you can expect a higher amount of security for your investment.
Fixed deposits (FD) are one of the best short term investment options available in the UAE. They are secure investments and you can easily invest your money in FD anywhere up to 10 years. While an investor can withdraw the money before the maturity date of FD, it is suggested to withdraw the money only after the maturity date since this financial instrument is not very liquid in nature.
For instance, if you invest in 2 years FD, which yields 10 percent interest rate and you decide to withdraw the money after 6 months then the financial institution will pay you a rate of interest that was valid for 6 months fixed deposit that could be 6 percent at the time of you invest the money in FD. Also, if you withdraw funds before the maturity date, you might end up paying a maximum of 1 percent of interest that is charged as penalty. However, it may vary from bank to bank.
Recurring deposits (RD) is an ideal option for those investors who don’t want to invest a lump sum amount in just one go. Rather, RD provides you the flexibility to invest money on a monthly basis. Recurring deposits from banks and financial institutions have a minimum tenure of 6 months and a maximum tenure of 10 years. But note that the rate of interest earned on RD is taxable.
These are amongst the feasible short term investment plan especially for those investors who have great stock market information. However, an investor must have a high-risk appetite for these kinds of investments because equity derivatives can be combustible in respect of price movement. Moreover, these types of investments are designed with a short-term mindset as the majority of these derivatives investments have an expiry of a maximum of 3 months.
Precious metals like gold & silver are considered one of the best investment options as they act as a hedge against inflation in the short-term as well as long-term. Historically, the rate of gold & silver has carried its value in the short-term and go high in the long-term. This is what makes these precious metals smart & low-risk short term investment. These types of investment plan tend to be more liquid when compared to other short-term investment options available in the market.
FMPs are ideally “close-ended debt funds” and they are limited tenure investments that come with a certain maturity date. Although returns from FMPs are not assured, many people opt for this option in case they’re looking for a lump sum investment solution.
Although there are various other short-term investment options available in the UAE, all the aforementioned are some of the best short-term investment options. You can opt for any of the options as per your convenience to make the most of your money.