{"id":12031,"date":"2022-06-02T16:03:16","date_gmt":"2022-06-02T10:33:16","guid":{"rendered":"https:\/\/kuvera.in\/blog\/?p=12031"},"modified":"2022-07-14T16:39:28","modified_gmt":"2022-07-14T11:09:28","slug":"how-to-invest-for-short-term-goals","status":"publish","type":"post","link":"https:\/\/kuvera.in\/blog\/how-to-invest-for-short-term-goals\/","title":{"rendered":"How to invest for short term goals"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_40 counter-hierarchy ez-toc-counter ez-toc-light-blue ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\">Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" area-label=\"ez-toc-toggle-icon-1\"><label for=\"item-69d31af25aad9\" aria-label=\"Table of Content\"><span style=\"display: flex;align-items: center;width: 35px;height: 30px;justify-content: center;direction:ltr;\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/label><input  type=\"checkbox\" id=\"item-69d31af25aad9\"><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/kuvera.in\/blog\/how-to-invest-for-short-term-goals\/#Why_debt_mutual_funds_for_short-term_goals\" title=\"Why debt mutual funds for short-term goals?\">Why debt mutual funds for short-term goals?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/kuvera.in\/blog\/how-to-invest-for-short-term-goals\/#What_kind_of_debt_mutual_funds_is_suitable_for_most_investors\" title=\"What kind of debt mutual funds is suitable for most investors?\">What kind of debt mutual funds is suitable for most investors?<\/a><ul class='ez-toc-list-level-4'><li class='ez-toc-heading-level-4'><ul class='ez-toc-list-level-4'><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/kuvera.in\/blog\/how-to-invest-for-short-term-goals\/#Final_Word\" title=\"Final Word\">Final Word<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/kuvera.in\/blog\/how-to-invest-for-short-term-goals\/#Interested_in_how_we_think_about_the_markets\" title=\"Interested in how we think about the markets?\">Interested in how we think about the markets?<\/a><\/li><\/ul><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<p><iframe loading=\"lazy\" title=\"YouTube video player\" src=\"https:\/\/www.youtube.com\/embed\/kZJDkvOG834\" width=\"560\" height=\"315\" frameborder=\"0\" allowfullscreen=\"allowfullscreen\"><\/iframe><\/p>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">In this video by Aditya Birla Sunlife Insurance, you will learn how to invest when you have less time on your hand to achieve your financial short term goals. It might be just a few months, but if you want to know how you can get great returns in a safe way, watch this video completely.<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">Generally in personal finance, we refer to investments as long-term plans. However, let\u2019s not forget that<\/span> short-term goals exist as well. Be it a phone, a vacation, or a bike &#8211; they all are short-term goals you might have. A financial plan is also required to achieve them. Let&#8217;s examine what types of investment instruments are suitable for short-term goals.<\/p>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">Consider only those investment avenues that make the best use of your fixed income. These include <\/span>debt mutual funds, fixed deposits, government and private bonds, NCDs, and various post office schemes.<\/p>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">The goal is to minimize volatility and earn greater returns that outpace inflation instead of simply letting your money sit in a bank account.\u00a0<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><a href=\"https:\/\/kuvera.in\/explore\/fixed-deposit\/c\/all\"><img loading=\"lazy\" class=\"size-large wp-image-13417 aligncenter\" src=\"https:\/\/kuvera.in\/blog\/wp-content\/uploads\/2022\/07\/FD-Banner_14-July-2022-1024x334.jpg\" sizes=\"(max-width: 640px) 100vw, 640px\" srcset=\"https:\/\/kuvera.in\/blog\/wp-content\/uploads\/2022\/07\/FD-Banner_14-July-2022-1024x334.jpg 1024w, https:\/\/kuvera.in\/blog\/wp-content\/uploads\/2022\/07\/FD-Banner_14-July-2022-300x98.jpg 300w, https:\/\/kuvera.in\/blog\/wp-content\/uploads\/2022\/07\/FD-Banner_14-July-2022-768x250.jpg 768w, https:\/\/kuvera.in\/blog\/wp-content\/uploads\/2022\/07\/FD-Banner_14-July-2022.jpg 1080w\" alt=\"Online Fixed Deposits on Kuvera\" width=\"640\" height=\"209\" \/><\/a><\/p>\n<p>&nbsp;<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Why_debt_mutual_funds_for_short-term_goals\"><\/span>Why debt mutual funds for short-term goals?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><b>\u00a0<\/b><\/p>\n<p><span style=\"font-weight: 400;\">Let&#8217;s say you are a money lender. Would you lend to people you don&#8217;t trust? So how do you know if the organizations you lend to are trustworthy? That is the main challenge while investing in fixed income. The only option is to trust your bank (yes, even a savings bank account means that you are giving them money) or the government.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">When you invest in fixed income, you&#8217;re lending your money to an organization directly or indirectly. You&#8217;re lending to the government if you invest in government bonds or G-secs. You&#8217;re lending to corporate entities if you invest in NCDs or commercial paper. <\/span><span style=\"font-weight: 400;\">In addition to the trust factor, there are other challenges. <\/span><\/p>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">Typically, debts must be repaid only when they are due. Getting your money whenever you want may not be possible, even with interest payments. Also, interest rates fluctuate from time to time. This has a significant bearing on the price of debt instruments. In other words, investing in fixed income can be more complex than in equity.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">This is where <\/span>debt mutual funds step in to solve issues like trust, liquidity, and duration. They mainly invest in the debt of entities that are considered reliable with the ability to withdraw and invest as and when required. These funds also generate high returns because of the lack of penalties on redemption before maturity, which is applicable to <a href=\"https:\/\/app.kuvera.in\/explore\/mf\/c\/all\/equity\">equity funds<\/a>. They also provide returns that make sense for short-term objectives (6%-7% for liquid funds and 8%-8.5% for short-term debt funds).<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<h2><span class=\"ez-toc-section\" id=\"What_kind_of_debt_mutual_funds_is_suitable_for_most_investors\"><\/span>What kind of debt mutual funds is suitable for most investors?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">Investing in <\/span>debt mutual funds <span style=\"font-weight: 400;\">can provide you with fixed-income investments, depending on the fund&#8217;s quality, duration, and interest. However, for most financial goals that are due within the next five years or less, liquid funds and short-duration debt funds are usually the best options since they invest in high-quality debt.<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">A well-rounded investment portfolio should include both to achieve stability and returns while meeting specific financial goals. Let&#8217;s say you are planning for a vacation in the next two years. A suitable liquid fund is ideal for that particular goal.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Tax-efficient returns are also offered by <a href=\"https:\/\/kuvera.in\/explore\/mf\/c\/all\/debt\">debt mutual funds<\/a>, especially if you hold them for longer than three years. This is quite useful if you plan to invest a considerable amount. For short-term goals, choose high-quality, short-duration debt funds with high liquidity.\u00a0<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">The addition of <\/span>debt mutual funds<span style=\"font-weight: 400;\"> such as corporate bonds can be an extra layer of stability when building a portfolio that withstands market fluctuations and generates returns suited to your goals.\u00a0<\/span><\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<h4><span class=\"ez-toc-section\" id=\"Final_Word\"><\/span>Final Word<span class=\"ez-toc-section-end\"><\/span><\/h4>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">The best of both worlds can be found in debt funds &#8211; they aim to offer investors a better return than fixed deposits while safely wading through turbulent market conditions.<\/span><\/p>\n<p>&nbsp;<\/p>\n<h4><span class=\"ez-toc-section\" id=\"Interested_in_how_we_think_about_the_markets\"><\/span>Interested in how we think about the markets?<span class=\"ez-toc-section-end\"><\/span><\/h4>\n<p>&nbsp;<\/p>\n<p>Read more: <a href=\"https:\/\/kuvera.in\/blog\/category\/zen-and-the-art-of-investing\/\" target=\"_blank\" rel=\"noopener noreferrer\"><strong>Zen And The Art Of Investing<\/strong><\/a><\/p>\n<p>Watch\/hear on YouTube:<\/p>\n<p>&nbsp;<\/p>\n<p><iframe loading=\"lazy\" title=\"Kuvera Insights\" width=\"640\" height=\"360\" src=\"https:\/\/www.youtube.com\/embed\/videoseries?list=PLDSzQdT9nLmCysU31bg4Ngh7WY2p3UiiI\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture\" allowfullscreen><\/iframe><\/p>\n<p>&nbsp;<\/p>\n<p>Start investing through a platform that brings goal planning and investing to your fingertips. Visit <a href=\"https:\/\/app.kuvera.in\/\"><strong>Kuvera.in<\/strong><\/a> to discover <a href=\"https:\/\/kuvera.in\/blog\/direct-plans-better\/\"><strong>Direct Plans<\/strong><\/a> and <strong><a href=\"https:\/\/app.kuvera.in\/explore\/fixed-deposit\/c\/all\">Fixed Deposits<\/a><\/strong> and <a href=\"https:\/\/kuvera.in\/user\/login\"><strong>start investing today.<\/strong><\/a><\/p>\n<p>#MutualFundSahiHai #KuveraSabseSahiHai!<\/p>\n","protected":false},"excerpt":{"rendered":"<p>&nbsp; In this video by Aditya Birla Sunlife Insurance, you will learn how to invest when you have less time on your hand to achieve your financial short term goals. It might be just a few months, but if you want to know how you can get great returns in a safe way, watch this [&#8230;]<\/p>\n<p><a class=\"btn btn-secondary understrap-read-more-link\" href=\"https:\/\/kuvera.in\/blog\/how-to-invest-for-short-term-goals\/\">Read More&#8230;<\/a><\/p>\n","protected":false},"author":11,"featured_media":12034,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mi_skip_tracking":false},"categories":[99,91,593],"tags":[11,884,647,883],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v20.6 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>How to invest for short term goals - Kuvera<\/title>\n<meta name=\"description\" content=\"Read now &amp; learn how to invest when you have less time on your hand to achieve your financial short-term goals.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/kuvera.in\/blog\/how-to-invest-for-short-term-goals\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"How to invest for short term goals - 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