It is difficult to predict returns on investment. It is not enough to just assume a particular rate of return; you must also consider other variables like inflation and taxes to assess what your investment will be worth in actual terms a number of years down the line.

You may accomplish it with the help of an **Investment Calculator**. In addition to calculating your rate of return over time, this calculator allows you to understand how variables such as the economic environment, taxes, and further investments may affect your investment over time.

You may also quickly adjust each of them to examine how changes in one or more aspects affect your investments over time and compare basic versus compounded interest outcomes.

__What is the ROI?__

__What is the ROI?__

Return on Investment (ROI) displays the profit made from your investments. It assists you in selecting the finest investment from many investment possibilities. You may assess the investment depending on your financial objectives and risk tolerance. You might also estimate the cost of your investment and seek hidden fees that could chip away at your profits.

Typically, the return on investment is stated as a percentage. Simply said, the return on investment is a financial ratio that allows you to weigh the benefits of your investment against the expenses. The following formula may be used to determine the return on investment: ROI = Net Profit / Investment Cost * 100

If you are an investor, the ROI will show you how profitable your investments are. If you invest in mutual funds, the return on investment tells you how much money you made from your mutual fund plans. ROI may be either good or negative.

If the return on investment is negative, the investment is really losing money. You must choose an investment that will provide you with the highest return over time.

__What exactly is an Investment Calculator?__

__What exactly is an Investment Calculator?__

The **investment calculator** is a simulation that may assist you in determining the profitability of your investments. You may use the **investment calculator** to calculate the return on investment across different time periods. The **investment calculator** consists of a formula box in which you input the original investment amount, the amount returned, and the investment duration.

The **investment calculator** displays the entire return on investment. It also displays the absolute return on investment, annualised return on investment, and CAGR (compound annual growth rate).

__How do Investment Calculators function?__

__How do Investment Calculators function?__

You must comprehend the distinction between the absolute and annualised returns on investment. The following formula may be used to compute absolute returns:

(End value of investment – initial value of investment)/Initial value of the investment

By multiplying the return by 100, you may convert it to a percentage. For example, suppose you made a Rs 25,000 investment that has increased to Rs 30,000. The absolute return may be calculated as 30,000 – 25,000 / 25,000 = 20%. The absolute return gauges the performance of the stock market over a one-year period.

If you want to determine the performance of an investment over different holding periods, you use the annualised return on investment. Annualised return can be calculated with the following formula: End Value – Beginning Value/Beginning Value * 100 * (1/holding period of the investment)

For example, you bought a house for 30 lakh in January 2010 and sold it for Rs 50 lakh in January 2020. You have the initial value of the investment as Rs 30 lakh and the final value of the investment as Rs 50 lakh. You have held the investment for five years. The holding period is five years.

Annualised Return = 50,00,000 – 30,00,000 / 30,00,000 * 100 * (1/5)

Annualised Return = 13.33%.

You may annualise the absolute return by multiplying by the factor:

365 / number of days the investment was held.

12 / holding period of investment in months.

1 / holding period of the investment in years.

__Best Short-Term Investment Plans in India__

__Best Short-Term Investment Plans in India__

__1. Savings Account__

__1. Savings Account__

Savings accounts are the most popular and adaptable kind of short-term investing. Savings account debit cards are maybe the finest feature of **short term investment plans**. However, if you are storing cash to be utilised later for certain payments, alternative short-term investments are preferable.

Because a savings account is also utilised for the bulk of cost payments, your lump sum amount may be accidentally influenced.

__2. Treasury Securities__

__2. Treasury Securities__

T-bills, or Treasury securities, are government-backed short-term money-market products. T-bills are issued by the Reserve Bank of India (RBI) as part of its open market activities (OMO). These bonds have zero-coupon maturities of 91, 184, or 364 days.

T-bills provide capital protection and consistent yields with maturities of less than one year. At the same time, you may swap banknotes if you need money quickly.

__3. Fixed Deposits (FD)__

__3. Fixed Deposits (FD)__

Fixed deposits are among the most popular safe **short term investment plans **in India. The greatest aspect is that you may invest directly in FDs using your bank account. As a result, storing surplus cash for short periods of time becomes fairly simple.

Nowadays, you may open FDs with terms ranging from 7 days to 10 years. You may also open FDs at your local post office. Post office FDs provide equivalent returns with no TDS.

__4. Recurring Deposits (RD)__

__4. Recurring Deposits (RD)__

Traditional safe investments include recurring deposits. With RDs, you may invest little sums on a regular basis to accumulate a big corpus. You may open an RD at your bank or at a post office using your savings account.

__5. Equity Mutual Funds__

__5. Equity Mutual Funds__

Equity mutual funds may be held for fewer than five years. However, given the volatility of financial markets, it is prudent to consider a longer time horizon. Even though equity funds enable withdrawals after just 12 months, your money may suffer as a result of an early withdrawal.

__Finishing Up__

__Finishing Up__

**Short term investment plans** are very liquid. Short-term investments may be quickly converted into cash without losing the invested value. The primary purpose of **short term investment plans** is to keep your money safe.

For example, your child’s higher education entrance fee is due in a few months. However, if your long-term investment has already matured, you may place the funds in a short-term investment until the payment is made.

The basic goal of investing in **short term investment plans** is to keep cash safe while earning income. For example, while creating an emergency fund pool, you want to invest exclusively in the safest possibilities available.

You put the money in super savers, fixed deposits, and liquid funds for this reason, among other things. However, despite their great liquidity, you should never invest your emergency money in equities, stocks, commodities, or derivatives.