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There are different types of mutual funds in India. Some of them are long term plans while some are short term. And in this piece, we are going to talk only about the short term mutual funds.

In short term mutual funds, the investors invest in the assets that are having the maturity of minimum 15 to 91 days or maybe less, which totally depends on the asset they are interested in. It is the best option for those who don’t want to invest in mutual funds due to higher risks because it involves very low risk. It also involves plans having a maturity of 2 to 4 months that are known as ultra-short-term funds.

Here are some of the benefits of investing in short term funds you need to know before investing:

1. Stable Returns:

While investing in these funds you can be relaxed to know that it provides stable returns on your investments. For this, you are mostly going to invest in Debt funds because they are much more reliable than equity funds. This is because they invest your amount in fixed income securities.

In this, you are going to get the fixed rate of return on a decided date of maturity. And they are immune to the capital market movement, so, you can be relaxed while investing in a short-term plan.

2. Diversification:

Another benefit of investing in this is that it helps you in diversifying your portfolio along with balancing it. It involves low risks and also offers some of the attractive returns on your investment within 3 years.

3. Fulfils Your Objective:

Moreover, they help you in fulfilling your objectives. It is going to offer you good returns within a shorter period. Apart from this, they also offer a higher post-tax return than any other plan.

So, if you want to encounter less risk, you can think of investing in short-term plans. You can get good returns within a few days, months, or years, totally depending on your needs. You don’t have to worry about anything because all the stuff will be managed by the professionals, who have complete knowledge about the investments.

They are going to help you out in choosing the right plan for you keeping your goals in mind. It is the best option for those who were running away from mutual funds due to higher risks.

If you want you can even invest in the long-term plans. There are going to be various benefits but they will come with a few risks that you should be prepared for.

You should choose a perfect plan for your financial growth and stability keeping all your purposes in mind because different types of mutual funds are fulfilling different needs of the investors.

To find the right one, you can search online or contact a professional who will guide you through everything. You just need to be clear in your mind to get the higher returns from your investments.

So, be smart and invest smart for healthy financial growth.


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