In addition to long-term investments, there are several types of short-term investments, namely:

1. Deposit

Are you familiar with deposits? Yes, this investment instrument is well known and widely used.

Although this investment instrument has a relatively small return, it is worth the lower risk. If you want to prepare short-term finances, then deposits can be the right choice of short-term investment instruments.

Reporting from the Economy Deposit Journal, deposit is a financial term that means money is deposited in a bank. A time deposit is a guarantee in the form of goods, money, or property to a bank or a trusted party to store or use it, then return it in kind.

This investment instrument is a transaction that involves the transfer of money to another party, with the aim of securing it.

However, a deposit may refer to a portion of money that is used as collateral or security for the delivery of goods.

Among several types of deposits, time deposits are the most well-known type. You don't need to worry, deposit security is guaranteed by LPS (Deposit Guarantee Agency). So, if things happen that are not desirable, then your money will still be protected.

Deposits also tend to be stable and low risk. This can be your consideration when choosing a time deposit as a short-term investment instrument.

However, the disadvantage of deposits is that you have to pay taxes and bank management fees. In addition, the value of money will always be eroded by inflation and decline. Interest earned on deposits also tends to be lower, because the risk is also lower.

2. Mutual Funds

The next short-term investment instrument, namely mutual funds. Are you still unfamiliar with this investment instrument? In fact, mutual funds are now a fairly popular option for novice investors.

Quoted from the journal Business & Bureaucracy, a mutual fund is a type of financial investment that consists of a collection of money collected from many investors to invest in securities. Among them, such as stocks, bonds, money market instruments, stocks, and other assets.

Today, you can also find many apps for buying mutual funds online. For that, if you are interested in short-term investment, then mutual funds can be an option.

Basically, mutual funds give small investors access to a diversified and professionally managed portfolio at a low price. There are several types of mutual funds as well that need to be understood. These include stock mutual funds, money market mutual funds, fixed income mutual funds, index funds, mixed mutual funds, income mutual funds, or global mutual funds.

You must understand each type of mutual fund investment, because it has a risk level ranging from low, medium, and high. Determine the type of mutual fund based on the ability of each risk. This short-term investment instrument can also be done directly or in installments.

Mutual fund investment can also be done systematically, that is, the amount of money you want to invest can be paid automatically every month.

However, the lack of transparency in investment ownership is also one of the weaknesses of mutual funds that can be taken into consideration

Source: Orami.co.id