Short-term investments have various advantages and are favoured by many to manage funds and gain returns. There are several short-term investment options, including Money Market Mutual Funds. This investment is suitable for conservative investors, namely investors who make investments and want minimal risk.
Some of the following short-term investments can be an option for you to invest without worrying about facing high risks. However, it should be noted that the potential returns from short-term investments tend to be smaller than long-term investments. This is comparable to the minimal risk.
Short-Term Investments to Choose From
Short-term investments are made by depositing funds with a relatively short management time, for example one year. You need to know that this investment is perfect for you to have or save emergency funds, plan vacation funds, grow company-owned funds, and buy new gadgets. In addition, short-term investments are also the right solution to gain passive income.
Here are some short-term investments that you can choose from.
- Money Market Mutual Funds
This type of Mutual Fund investment does not have high risk and has a great opportunity to provide stable profits or returns. This investment is suitable to avoid decreasing principal investment.
Money Market Mutual Funds are a type of Mutual Fund which portfolio is allocated 100% in Money Market instruments, including debt securities that matures in less than a year.
In addition, the advantage of this type of Mutual Fund investment is that you will not be penalized when you suddenly need to withdraw funds. Even so, it would be better to withdraw funds when the investment gains the maximum profit.
- Gold
Investing funds by buying gold is nothing new. Gold is indeed quite reliable to be used as an investment and used as a precaution when experiencing a financial crisis. Gold has high liquidity and can be cashed or traded easily.
Investing funds to buy gold is also the right step as an emergency fund preparation because the buying and selling process can be done anytime and anywhere. Even so, selling gold when its value drops can also cause losses for you.
- Fixed Deposits
Fixed Deposits are a type of bank savings made by depositing funds and keeping them for a certain period. The money you have can be withdrawn when it matures, for example in one or two years. Fixed Deposits are short-term savings that are safe and secure because they have been supervised by the Deposit Insurance Corporation (LPS).
You can still withdraw your funds before the maturity date, but the bank will give you a penalty of around 0.5 to 3 percent of the total amount of deposits you have.
- Government Securities (SBN)
State Securities (SBN) are issued by the government and can be one of your investment options. SBN has the goal of opening opportunities for the public to contribute to financing the country's development.
SBN is an option for those of you who want passive income with relatively high profits and guaranteed security by the state. Payment of capital in investment and coupons will be given within a certain period. There are several types of SBN, for example Government Securities (SUN), State Sharia Securities (SBSN), and so on.
- Term Savings
Like Money Market Mutual Funds and several other short-term investment options, term savings also carry a low risk. Term savings require the customer to deposit a certain amount of funds according to a mutual agreement to achieve the intended target.
This short-term savings is suitable for preparing children's education, expenses for religious pilgrimage, and so on. Unlike the usual types of savings, term savings have higher interest. In addition to low risk, this savings is also not subject to administration fees.
Those are the types and characteristics of short-term investments that you should know to suit your investment goals. After knowing the types of short-term investments above, some of the advantages of these investments will also be explained in full below.
Advantages of Short-Term Investment
There are several factors that make short-term investments attractive to investors. Below is an explanation of the advantages of short-term investing that you should know about.
- Faster Returns
This type of investment is perfect for those of you who have a short time goal for investing. With terms from monthly to 1 or 2 years, you can receive returns on invested funds.
The yield or return that can be obtained is in line with the length of investment time. When you make a profit, you can decide to reinvest it for higher profit potential or use it for a specific purpose.
- Alternative Emergency Fund
Because the timeframe is relatively short, this investment is very suitable to be used as an alternative emergency fund. Compared to savings, short-term investments are far more suitable for gaining profits and raising an emergency fund. In addition, disbursement can also be done easily.
- Become a Passive Income
Low risk, stable profits, and safe, short-term investments is a solution for obtaining passive income. This investment is also very flexible, such as Mutual Funds that can be invested anywhere and anytime, or Fixed Deposits with adjustable period.
- Stable Investment
Short-term investments have relatively stable profits and you don't need to worry that the principal investment fund will decrease and suffer losses. Even though the potential gains are relatively lower than long-term investments, this is quite worth the low risk.
Why Invest in Money Market Mutual Funds at DBS Treasures?
After knowing everything about short-term investing and its advantages, which type of investment is your choice? Money Market Mutual Funds are the right instrument for investment.
Moreover, the advantages and flexibility are quite high. Low risk, high liquidity, stable profit potential, a flexible time period, and not subject to tax make this investment the right choice.
To invest in Mutual Funds, you can entrust it to priority banking DBS Treasures which has various advantages, namely as follows:
- Investment Management by Professionals
All DBS Treasures investment options are managed by professional Investment Managers to ensure optimal product performance.
- Investing Insights and Guides
There is a financial team who are experts in their fields to proactively convey the latest opportunities and market analysis curated to your profile and aspirations, so you can make the right move at the right momentum confidently.
- Diversification to Reduce Risk
Diversification is done by spreading your funds across various investment assets to reduce existing risks.
- More Practical with the digibank by DBS Application
Switching, selling, buying, and SID (Single Investor Identification) registration activities can be done easily in one application.
Those are the advantages of having DBS Treasures as your wealth management partner in Money Market Mutual Fund investments. To find out more information about Mutual Fund investments, you can visit the following link https://www.dbs.id/id/treasures/investasi/mutual-funds/what-is-mutual-funds-and-equities.
Let's manage your funds in Mutual Fund investments confidently with DBS Treasures and gain profitable return potential.
