Investing isn’t always just a long-term financial strategy. When you want to see returns on your money in a shorter time frame, say a couple years or even a couple months, then implementing a short term investment strategy with the best short term investments is very achievable! Perhaps you’re saving up for a goal with a relatively close deadline. Maybe you’re accumulating enough funds for a down payment on a home within 5 years, paying off a significant chunk of debt that your current income is dragging on, or taking the family on a vacation overseas. Whatever the reason, you want to have the best short term investments possible to earn a high rate of return on your investments and keep your principal safe.

Best Short Term Investment Options

Regardless of your reason for wanting to invest for short term gains, there are plenty of different options for the best short term investments available. Here are eight of the best:  

Short Term Bonds

Known as some of the most reliable investment options out there, bonds are always a good place to start building a short term investment portfolio. You can choose from a variety of bonds – corporate, municipal, federal (Treasury) – with different maturation dates ranging from a few days (in rare instances) to a few decades. A short term bond may produce a lower rate of return compared to a long-term bond, but if you’re looking for a secure investment with a consistent rate of return, then adding short term bonds to your portfolio is the way to go.

Certificates of Deposit (CD) 

Why hold onto cash investments when you can put that money to work in a certificate of deposit (CD)? Like bonds, CDs offer consistent returns, paid out to investors when the CD reaches maturity (you can choose 2-3 months or 1-2 years in many cases). You can invest in a CD through a bank, credit union, or other reputable financial institution and get your money back with interest once it matures and the money becomes available again. There are often times minimum deposit amounts required to secure certain interest rates on CDs. Interest rates depend on where you take out the CD and the duration of the CD, but you can expect to receive somewhere between 0.21-2.00%.

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