What are the best short-term investment options with high returns in the UAE?

As the curtains close on 2022, we’re sure you want your finances to kick into high gear ovethe course of the new year. If you’re looking for a way to multiply your wealth quickly in 2023, we’ve got just what you need.

What are short-term investments?

Before we unveil the best short-term investment options, it’s imperative to understand what it actually means. Investments can be bifurcated into two categories – short-term and long-term assets. If you’re uninterested in waiting for long years to compound your wealth, in that case, short-term investments are perfect to help you meet your financial expectations without locking in your money for extended periods.?

Short-term investment plans allow you to invest in certain assets that are designed to offer sizeable returns coupled with liquidity over a short span, typically ranging anywhere between 1 to 5 years, and with a focus on fulfilling short-term financial goals. Moreover, these plans have a plethora of benefits, like restricted risk exposure due to their shorter maturity period, offering investors with high returns, a low-risk quotient, and high liquidity.

Five best short-term investment options in the UAE:

1. High-yield savings accounts

This type of savings account is considered one of the best alternatives to holding cash in a checking account. The high-yield savings account works incredibly well for risk-averse investors and those looking to make their money back over a short period. Most banks and financial institutions offer a high-yielding savings account and, upon request, might assign a wealth manager to provide advice and guidance on using the dividends from the interest to reach your longer-term financial goals.

2. Liquid Funds

This mutual fund enables investors to allocate their funds to short-term government certificates, bonds, securities, or deposits. The most significant benefit of Liquid Funds is that it allows for the investor to withdraw the funds at any given point. However, it is not advisable to invest any of your emergency funds as withdrawals typically take two to three business days. Another benefit of this plan is that it offers a high-interest rate, up to 7 per cent. An added layer of security comes along with these funds as the investment is placed in money market options, which mitigates risk.

3. Fixed Deposits

Often a new investor’s go-to, Fixed Deposits have frequently been regarded as one of the best short-term investment options in the UAE. The deposit can be matured for up to 10 years, but can also be withdrawn before its maturity date. However, it is not advisable to do this.

For example, suppose you invest in a Fixed Deposit for five years. Which yields a 10 per cent interest rate, and you withdraw after six months; the financial institution is only liable to pay you the rate of interest valid only for those six months. Despite this, due to its benefits and security, this remains one of the nation's most popular short-term investment plans.

4. Recurring Deposits

This investment option is ideal for those who want to avoid investing significant money in one go. Recurring Deposits offer flexibility to invest money on a month-to-month basis with a minimum tenure of 6 months and a maximum tenure of 10 years. This is perfect for new investors looking to get started in investing their savings.

5. Gold & Silver

Precious metals are considered one of the best investment options as they act as a counter against inflation. The gold and silver rates have carried value over the course of the short term and go high in the long term, making these metals a wise and low-risk short-term investment. This investment type, in particular, is highly liquid as compared to other options available in the market.

Short-term investments are relatively safer than longer-term investments, like stocks, and are optimal for compounding your growth quickly. Which of these investment options is the most appealing to you? Let us know in the comments below.

About Hedge & Sachs:

Founded in 2021, Hedge & Sachs is a leading independent asset management firm offering clients personal financial advice and asset management solutions for safe, hassle-free investments. Hedge & Sachs provides a broad range of financial services including Asset Management, Financial Consultancy, and Investment Consultancy.

Website:?https://hedgeandsachs.com/