Taking a vacation abroad might be your short-term goal. However, accumulating funds for an international trip can get difficult. But by investing in a few short-term investment options, you can accumulate funds to go on the trip you want.

In this article, we will discuss short term investment options that can help you accumulate funds for your international trip.

Many desire to go on an international trip. But a lot of people might find it difficult to accumulate funds for this goal as a vacation abroad can be very expensive.

If you also want to take an international trip this year, then you should start investing to achieve this goal. One of the options is a savings plan. You can regularly invest in this plan to save money for the trip. You can easily buy savings plan online. Investing money regularly can help you accumulate funds in an easy way. This will not put a burden on you and allow you to earn good returns. The best way to achieve this goal is by investing in short term investments.

Short Term Investment Options

These investment options allow you to invest your money for a short duration and gain returns. Here are some of the investment options-

• Ultra-Short Duration Funds

One of the best short term investment plans for 2022 are ultra-short duration funds. These are debt funds that invest in debt and money market instruments. The maturity period of ultra-short duration funds is between 3 and 6 months. These are low-risk investment funds.

• Short Duration Funds

Unlike ultra-short duration funds, which have a maturity period between 3 and 6 months, short duration funds have a tenure between 1 and 3 years. These funds also invest in debt and money market securities. Short duration funds are riskier compared to low duration funds, liquid funds, and ultra-short duration funds. The earnings that you can make from these funds will be from capital gains and interests.

• Liquid Funds

Primarily, liquid funds invest in short-term fixed-income money market instruments such as treasury bills, commercial paper, certificates of deposits, etc. They have a maturity of up to 91 days.

Liquid funds invest in securities that are of good quality for short term. Primarily, returns are gained from interest. These funds also offer capital gains. But they are a small part of the total earnings.

Furthermore, the prices of short-term securities tend to stay constant. Hence, these funds are safer compared to other longer-maturity securities. You should keep in mind that capital gains on liquid funds are taxable. If the fund is sold after holding it for 3 years, then long term capital gains tax will be levied. Short term capital gains tax will be levied on funds sold within 3 years.

• Hybrid Mutual Funds

Hybrid mutual funds are great short and medium-term investment options. They are suitable for investors who have a low or moderate-risk appetite.

Hybrid mutual funds invest in two or more classes. Generally, these mutual funds invest in equity and debt in order to build a stable portfolio while trying to achieve the desired returns. These funds are riskier than debt funds. Hybrid mutual funds allocate money in equity and debt instruments based on the risk appetite, financial goals, and investment tenure of the investor.

Accumulate Funds for Your International Trip with These Options

An international trip can be very expensive. Understand these investment options to pick the one that can help you generate funds for financing the trip.