Short-term investment instruments are mostly preferred by investors who want to put their savings to good use. What are short term investment instruments and what can you do for a short term investment:

1. Short Term Deposit Accounts:

Deposit accounts; 1, 3, 6 or 12-month maturity options are the instruments by which you can get interest income. It’s generally preferred due to risk free. Interest rates in banks range from 9% to 5%.

      Pros

• risk free compared to other investment instruments.
• up to 100 thousand TL is covered by insurance.

      Cons

• The return is lower compared to other investment instruments.
• Some banks may charge an account operation fee.

2. Interest-free Participation Accounts:

If you do not want to earn interest, you can get a profit share by choosing to open short term participation account. Participation accounts are opened by participation banks and provide 1 month, 3 months, 6 months, 1 year maturity or more.

      Pros

• insured up to 100 thousand Liras.
• Interest-free banking principles can be used by those who do not want to earn interest.

       Cons

• Participation account holders are not given a fixed return commitment and no capital guarantee.
• provides less return than other investment instruments.

3. Short-Term Treasury Bills

Treasury bill is another investment instrument that can be preferred in the short-term due to its yield and risk-freeness in a year or less. The treasury bill is safe because the state will be borrowing in the short term. If you are thinking about more than a year, the government bonds might be a more viable alternative for you.

      Pros

• under state security.
• When maturity is considered, it gives same average return as deposits.
• easily be turned into cash.

      Cons

• may not meet expectations against inflation
• may provide the surplus return in a situation where the interest rates are falling, or vice versa.

4. Short term investments in the stock market

Daily buying and selling can be done within the session times. Since the yield is higher than the long-term stock exchange investment, the risk is also higher.

      Pros

• provide high returns in the short term.
• can be bought and sold during session times.

      Cons

• The risk factor is higher compared to long term stock market investment.

5. Foreign Exchange Trading with Forex Market

Although it is risky, it can provide high yield in the short term. With the leverage in the system, high transactions can be realized with a low amount of money and more profit can be obtained in short term.

Pros

• provide high returns in the short term.
• Leverage feature allows for highly consistent transactions.
• can be operated 24 hours a day, 5 days a week.

Cons

• risky, the use of leverage raises the risk even more.
• requires intense follow-up of global developments.
• Forex brokerage houses can receive commissions through transactions.