If you have some surplus money that you need to invest for a short duration, here are some short term ideas. Since the amount is not large, there should not be much of a worry on the taxation front. Take a look at some options.
Ujjivan Financial FDs
You can get fetch an interest rate of 8 per cent on a 1 year deposit at Ujjiavn Financials. This is a small finance bank, which is regulated by the RBI. If you are looking at a slightly higher tenure of 2-years, the interest would still remain 8 per cent. The interest earned on the deposits are fully taxable.
Ujjjivan is among the top micro finance lenders in the country with a huge 7,786 employees and gross assets under management of Rs 40.88 billion as on September 2015.
The deposit is good for those looking to earn a decent return, especially if you do not have tax liabilities.
This is a full-fledged commercial bank and was among the few along with Bandhan Bank to be granted a commercial bank license. The bank offers an interest rate of 7.50 per cent on a 366-day deposit, which is way better than what most commercial banks in the country are offering.
The interest earned is fully taxable and the bank compounds interest every quarter, so your yields could be higher. Not a bad bet in terms of safety and returns. The longer tenures have lower interest, so you may opt for the 366-day options. This is a listed commercial bank in the country.
Suryoday Small Finance Bank
Like Ujjjivan , this is another small finance bank that was granted license by the RBI. The bank offers an interest rate of 8.75 per cent per annum on fixed Deposit for period of more than 24 months to 36 months for amounts, less than Rs. 1 Crore (Non-Senior Citizen). This is the best that it gets in terms of interest rates.
Even the savings bank interest rate being offered by Suryoday is not bad at 7.25 per cent. Interest earned on savings bank account is exempt up to Rs 10,000.
This is a government of Kerala owned entity and offers an interest rate of 8.25 per cent on its 1 year deposit. In case you want to go for a slightly larger tenure the interest remains unchanged at 8.25 per cent for two years.
Upto Rs 2,000 crores of deposits is guaranteed by the government of Kerala and hence the risks to these deposits are minimal.
This is one of the safest and the highest interest rate deposits currently. Interest earned on these deposits are fully taxable. However, if you withdraw the deposit early there is a penalty and hence do not invest if you wish to withdraw the deposit before one year.
Investing Rs 50,000 to Rs 1 lakh safely in KTDFC deposit is not a bad idea.
If you want to move away from bank FDs and look at shares, it may not be a bad idea to look at NMDC. The company's share at the current market price of Rs 122, can offer you a decent dividend yield of 4 per cent. The dividends earned are tax free up to a sum of Rs 10 lakhs.
The shares are not too risky to buy, as they do not fall too much on account of the dividend yield that they offer. The company is into the mining of iron ore and is a cash rich debt free company.
The shares of Coal India at the current market price offers you a dividend yield of 7 per cent. The shares are almost similar to NMDC, in the sense that it is cash rich company and also debt free. Not a bad bet to invest safely Rs 1 lakh for one year and maybe beyond on account of the dividend yield.