How to achieve short term goals using mutual funds?

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works even for your short term goals. Set up SIPs in mutual fund scheme through an auto debit facility to save regularly to build funds for meeting short term goals which may arise. 4. Returns : Mutual funds returns are market linked and each and every scheme return will depend on the portfolio in which it invests. Short term bond funds were giving returns to the tune of 9% when the interest rates were high. Now, one should moderate his expectations given lower interest rates. The same holds even in traditional avenues such as fixed deposits where the interest rates have come down. While investing you need to factor in the interest rate scenario which will give you an indication what returns you can expect. Reaching your short term goals requires good amount of planning as the difference in returns among various investment options in fixed income space have reduced post Union Budget 2014. But mutual funds have an edge over traditional deposits with the probability of higher returns they are able to generate. You can allocate some money to fixed income mutual funds and earn extra returns.