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Saving and Investing: 5 Best Short-term Investment Options for Your Money


The truth is, investing isn’t something you can undertake for a relatively short period and hope to build wealth or a hasty strategy to get rich. Investing is, for the most part, a long-term process, which requires commitment, patience, and staying calm when the market wavers, as it certainly will.

However, know that there are alternatives for investing on a short-term basis. Short-term investments or temporary investments are ventures made with the assumption of a definite timeline, usually three years or less. This type of investment is a low-risk investment with smaller predictable returns.

There are different short-term investment options suitable to you and probably the right one depending on your specific preferences and situation. For a little help, listed below are the five best short-term investment options for your money.

Short-term Bond Funds

This type of short-term investment is a mutual fund that invests in bonds with the normal maturity terms of at least three and a half years. Short-term bond funds can greatly vary from tax-exempt bonds to government bonds to taxable bonds to corporate bonds.

Though tax-exempt bonds may have a much lower interest rate compared to taxable bonds, if you are in a high tax bracket, then your after-tax yield might be higher. Some investors prefer short-term bond funds because they are less susceptible to interest rates compared to portfolios with longer time.

Because of the brief duration of their latent bonds, they are less dangerous than long-term investment options, even though this type of investment can forfeit its value once the interest rates ascent.

For instance, if interest rates rise and your bond in the fund has a full bloom of at least two years, then you’re stuck-up with a much lower rate for two years. On the other hand, if it were a twenty-year bond, you would be stuck-up with a much lower rate for a long period. 

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Peer-to-Peer Lending

P2P or peer-to-peer lending is a debt financing method that allows a person to lend and borrow money without the need to use any authorized financial institution as a mediator or negotiator. There are many P2P lending websites out there that enable investors to open up their portfolio by dispersing their investments and lowering their risk.

These lending sites act as tools or mediums to link investors to eligible individuals who need to get a loan and enable these investors to become the bank lending a small amount of percentage of diversified borrowers’ loan. The investors redeem notes and collect a monthly income through the interest and loan repayment. Thus, it’s a win-win situation for both parties.

Certificates of Deposit

Certificates of deposit connect difference between investing and saving. A CD is a deposit that you can lock in or put at a bank for a definite period, as long as it doesn’t exceed ten years. The bank will then compensate you a much higher interest rate, seeing that you aim to keep your savings in the bank for a long time.

However, make sure that you take your time looking for the right bank. Know that some banks pay a little amount of interest on CD’s, so it’s of the utmost importance to shop around. On the other hand, smaller, progressive banks are usually searching for long-term deposits, and are eager to pay a higher interest rate to entice new accounts.

One of the many advantages of Certificates of Deposit is that they’re FDIC (Federal Deposit Insurance Corporation) guaranteed. With that said, when the bank falls flat the FDIC will secure you from your loss. Therefore, be sure to purchase Certificates of Deposit from FDIC-guaranteed institutions.

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Exchange-traded Funds

Exchange-traded funds are marketable securities that can track bonds, index, a commodity, or a handful of assets such as an index fund. If you’re on the hunt for an assertive short-term investment, then the ETF might be the perfect option for you.  

One advantage of exchange-traded funds is that a single fund can or capable of holding thousands of bonds or stocks. Thus, you’ll get more diversification than buying individual bonds or stocks yourself.

Moreover, you can also choose particular sectors of the market in which you’d want to invest. Additionally, you don’t need to put much effort and time to oversee the details of your investments because professionals are managing these funds.

Money Market Funds

Of course, you want to invest your money in a short-term investment that’s safe, liquid and offer great returns, and money market funds have all these attributes. This investment option is the perfect place for investors and corporations to invest their money on a short-term basis while waiting for the chance to deploy it.

Your invested money is freely accessible, there’s an insignificant risk of default, and it’s properly and perfectly diversified. As such, even if you can’t do some of your obligations, it will not affect the money market funds’ overall value.

This type of investment can generate higher returns for short-term investors compared to bank accounts. For the most part, the returns equate with that money earned above the risk-free rate of return, though there are many options for less aggressive and more aggressive accounts. To help you out, seek advice from any financial firms such as Ashe Morgan.


If you only have a short time to invest your money, there are various options that you must consider other than the usual savings and checking accounts. To know your options, determine the amount of money you’d want to invest and allocate in short-term investments, as well as the amount of risk you are ready to take. But, whatever short-term investment option you select, be sure to do your research.

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