How to earn money fast: Know where to invest for one, two, three, four, six or 12 months

Kshitiz Mahajan, Co-founder Complete Circle Consultants told Zee Business TV, "From goals of one month to a money requirement in one year, you can invest and gain better returns from short term funds with a slightly higher risk than banking deposits.

You can invest and gain better returns from short term funds with a slightly higher risk than banking deposits.

Everyone cannot wait for 3, 5 or 10 years to get returns on his/her investments. Sometimes you may need money in a very short span of time. But, is there anything better than a savings account, fixed deposit or a recurring deposit returns? Well yes, short-term and liquid funds are the best suitable funds to multiply your money fast. Kshitiz Mahajan, Co-founder Complete Circle Consultants told Zee Business TV, "From goals of one month to a money requirement in one year, you can invest and gain better returns from short term funds with a slightly higher risk than banking deposits. As these funds invest money in instruments that have short maturity, you can claim your invested money in a very short span.''

Here are some funds, which are ideal for your short term goals:

1 to 2 month goal: Liquid fund

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Liquid funds are simply debt mutual funds that invest your money in very short-term market instruments such as treasury bills, government securities and call money that hold the least amount of risk. The maturity period of these funds is usually between one to two months.

''Liquid funds can fetch you up to 6.5 to 7% pre-tax returns and these are comparatively less risky as compared to other investments. They are usually meant for short term investments as liquid funds managers invest money in short term lending instruments,'' Mahajan explained.

3 to 4-month goal: Ultra short term fund

Ultra short term funds are very short term Mutual Funds that invest in a combination of debt instruments including treasury bills, certificate of deposits, commercial papers and corporate bonds. Generally, some of the best Ultra Short Term Mutual Funds have a residual maturity ranging from 6 months to 1 year.

2 to 6-month goal: Arbitrage Fund

Arbitrage funds work by exploiting the price differential between the cash and futures markets. Rather than purchasing stocks and then selling them later after the price has gone up, for example, an arbitrage fund purchases stock in the cash market and at the same time, sells a contract in the futures market.

"These funds possess higher risk than Ultra short term funds but lower than equity funds. These funds also issue dividends on monthly basis and is a suitable option to invest for a short term time frame up to 6 months,'' said Mahajan.

6 months to 1 year: Short term fund

Short term funds invest money in debt instruments and have a maturity from six to 9 months. ''They possess higher risk than liquid, arbitrage or ultra short term fund but are comparatively better option to invest and gain around 7 to 7.25% returns for a less than one-year goal,'' Mahajan said.

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mutual funds