15 Short-Term Investments You Should Know

Finding the right place to park your cash for a few months or a year helps keep your business flexible and safe from unexpected shocks.

For founders, marketers, and small business owners, short-term investments play a big part in balancing risk and return without tying up funds for too long.

Smart short-term options focus on capital preservation and liquidity. They let you grow your cash a little, but without sacrificing easy access when payroll, marketing expenses, or new opportunities pop up.

From simple savings accounts to specialized business vehicles, the right choice depends on how soon you’ll need your funds and your comfort with small risks.

This post covers 15 practical short-term investments to help you protect your cash, earn more than a regular account, and respond fast to whatever comes next.

Each option is broken down so you can spot the best fit for your business’s needs and stay prepared for growth.

If you’re also considering balancing risk and protecting your principal, check out these high-risk investment ideas for a broader list of possibilities.

What Defines a Short‑Term Investment

Short-term investments are designed for quick cash needs and stability. These options work best for founders and business owners who need their money working for them without locking it up for years.

Think of them as financial pit stops: your funds earn more than a standard account, but you can still grab that cash fast if an opportunity or emergency pops up.

Before you dive into the top picks, it helps to understand what sets these investments apart. Two things matter most: how long the money is tied up (the time horizon), and how safe and accessible those funds are.

Learn more about Short Term Investment by reading this article, Short-Term Investments: Definition, Types, Characteristics and Importance.

Time Horizon and Liquidity

Short-term investments generally have a window of zero to three years. This means you expect to need the money back soon, whether it’s for operating expenses, payroll, or a new marketing campaign. You want funds that can be converted to cash without delay or penalties.

Quick access is essential. Waiting months to cash out could leave your business scrambling when bills come due or a chance for growth appears. Liquidity ensures you don’t have to disrupt your plans or pay unwanted fees just to get your cash.

Key reasons entrepreneurs prioritize liquidity:

• Cash flow for rent, inventory, or payroll.

• Buffer for unpredictable costs (like repairs or slow sales).

• Ready capital for seizing discounts, bulk deals, or urgent marketing tests.

When comparing options, always check how soon you can withdraw funds and what fees, if any, could cut into your returns.

Risk vs. Return Balance

Short-term investors focus on safety over chasing the highest returns. If your business can’t afford surprises, you want the principal protected.

Unlike stocks or high-growth assets, these investments tend to offer lower (but more predictable) earnings.

How to balance risk and return in the short term:

• Look for stable products (e.g., savings accounts, money market funds, T-bills).

• Evaluate any insurance (like FDIC coverage) or backing the option offers.

• Assess the track record for volatility and past performance.

Returns are part of the story, but avoiding losses is often more important. A big drop in value can do real damage if you need to cash out quickly.

If you’re weighing how much risk to take, think about the role each dollar plays. Funds set aside for crucial operations should go into safer vehicles. Extra cash that’s not needed for a while can handle a bit more risk if it means a better payoff.

Looking for ways to protect and grow your cash while staying nimble? It’s smart to mix and match several short-term options to fit your needs and keep your business agile.

You may also benefit from reading about how a high-income investor strategy balances risk and reward, even if you’re running a smaller operation.

Low‑Risk Savings and Money‑Market Options

For business owners keeping cash liquid and protected, low-risk savings and money-market accounts remain hard to beat.

These tools help you grow your idle funds with minimal exposure or restrictions. Let’s break down some top choices so you can move your company’s savings to work without much stress or risk. 

To understand what Money Market Options are all about, see this guide, What is a Money Market?

High‑Yield Savings Accounts

High-yield savings accounts give you more interest than basic options and often rival the returns of bigger investment vehicles.

Most US accounts at reputable banks and credit unions come with FDIC insurance up to $250,000 per depositor, per bank. This means your money is safe from bank failures.

Most high-yield savings accounts pay between 4.0% and 5.0% APY. These rates are variable, so they may adjust as the Fed changes its policy. Good news for business owners, many of the best accounts now charge no monthly fees and require no minimum balance. Choose an account that:

• Is FDIC insured

• Has no or low monthly fees

• Offers easy online access and fast transfers

Look at terms carefully. Some “high-yield” offers come with hidden caps, so always check if the rate cuts off after a certain balance.

Cash Management Accounts

Cash management accounts blend the flexibility of checking with the earning power of a savings account. You’ll find these accounts at investment firms and fintech platforms.

They pool cash into larger partner banks to spread FDIC coverage, often offering protection above the usual $250,000 cap.

Business owners like them because you get:

• Fast, free transfers to brokerage or checking

• Debit cards for purchases and bill payments

• APYs often at or above leading savings rates

Some providers require a minimum deposit or average daily balance to unlock the best rates. Firms like Fidelity, Schwab, and many online brokers now offer versions of these accounts.

For maximum benefit, pick an account with no inactivity fees and easy integration with your main bank.

Money Market Accounts

Money market accounts (MMAs) are ideal when you need blend savings features with checking flexibility. They pay a bit more than standard savings accounts, and most are FDIC or NCUA insured if held at a bank or credit union.

Eligibility is straightforward: open one at your bank or credit union, sometimes needing a small minimum deposit. Withdrawals are usually limited per month (often six), but you can write checks or use a debit card.

What sets MMAs apart?

• Higher yields than regular savings (the average is about 4.2% APY)

• Liquidity, letting you access funds almost as fast as in a checking account

• Deposit insurance for peace of mind

Watch for minimum balance requirements. Sometimes, going below a set amount will trigger fees or a lower rate.

Money Market Mutual Funds

Money market mutual funds invest in short-term government securities, commercial paper, and certificates of deposit. They’re not bank accounts, so they don’t carry FDIC insurance.

Still, these funds are known for low risk, as the underlying investments are very stable.

For founders and small businesses, they can work well as a place to park large sums while waiting to deploy cash elsewhere. You can typically withdraw at any time, making them almost as liquid as a savings account.

What matters most?

• Expense ratios: Lower fees mean more of your yield stays in your pocket

• Quality of fund holdings (US Treasuries tend to be safest)

• Some funds offer tax advantages, particularly if they focus on municipal bonds

Review each fund’s prospectus before you invest. While rare, money market funds can technically “break the buck” drop below $1 per share so only pick top-rated, reputable options.

No‑Penalty Certificates of Deposit (CDs)

No-penalty CDs hit a sweet spot for short-term saving with a set return. They pay a fixed rate like traditional CDs, usually a bit better than standard savings, but you can withdraw your funds early with no fee and no lost interest.

Banks and credit unions often offer terms from 7 to 18 months, with rates mostly between 4.0% and 5.1% APY. You get:

• FDIC (or NCUA) insurance

• Rate locked in for the full term

• Early access to your money if cash flow needs change

If you want a hassle-free way to grow your savings but might need flexibility, no-penalty CDs can fit right into your short-term strategy alongside other safe, high-yield options for business cash reserves.

These choices offer a great mix of growth and accessibility for your business funds. Combine a few for even better flexibility, depending on your operating needs and comfort level with liquidity.

Short‑Term Bond and Treasury Strategies

Short-term bond and Treasury assets give founders and small business owners a safe way to grow funds that need to stay liquid.

These tools let you capture steady yields without betting your business savings on the swings of the stock market.

Each option suits a different goal, whether you want government-backed security, tax-free income, or a touch more return in exchange for a bit of added risk.

U.S. Treasury Bills (T‑Bills)

U.S. Treasury Bills are about as safe as it gets. They’re backed by the full faith and credit of the U.S. government.

That means you don’t have to worry about losing your principal, even if the economy takes a dip.

T-Bills are issued in short maturities, usually 4, 8, 13, 26, or 52 weeks. You buy them at a discount, and when they mature, you get the full face value. That difference is your interest.

Here’s how you can add T-Bills to your business cash plan:

• Buy directly: Use TreasuryDirect.gov to purchase bills in increments as low as $100. No broker needed.

• Through ETFs: Financial platforms and many business brokerages offer Treasury Bill ETFs, giving easy trading and automatic diversification.

T-Bills are a top pick for cash you want ultra-safe and available soon.

Short‑Term Treasury Inflation‑Protected Securities (TIPS)

Inflation can erode the buying power of your cash, but short-term TIPS fight back by adjusting your principal with the Consumer Price Index. With TIPS, you get a base interest rate plus a “bump” that matches whatever inflation does.

Short-term TIPS are best for funds you won’t need for about one to three years. They’re government-backed, so the risk of default is extremely low.

For business owners holding onto savings for new equipment, a future product launch, or a planned expense, short-term TIPS keep your purchasing power steady even if prices climb.

You can snag these via TreasuryDirect or invest in a TIPS-focused fund or ETF for easier buying and selling.

Short‑Term Government Bond Funds

Rather than tying up cash in a single Treasury, short-term government bond funds pool multiple U.S. government securities, bills, notes, and even agencies. This spreads out risk and can often offer a slightly higher yield than bills alone.

You can buy these funds through:

• Mutual funds (great for automatic reinvesting)

• ETFs (easy to buy and sell anytime the market’s open)

Trading is straightforward, with most funds letting you move money in or out on your schedule. Because the underlying bonds are short-term and backed by the government, fluctuations are minimal.

It’s a solid set-it-and-forget-it option for steady returns.

Short‑Term Corporate Bond Funds

Corporate bonds add a bit of risk for a higher yield. Short-term corporate bond funds gather dozens or hundreds of short-maturity business loans, spreading risk across companies and industries.

What should you watch for?

• Credit quality: Stick to funds that hold mostly investment-grade bonds. They’re less likely to default, even if the economy gets bumpy.

• Expense ratios: Lower is better. Fees eat directly into your earnings, so compare before buying.

In return for mild extra risk, corporate funds can pay better yields than government bonds. They’re a good fit for business owners seeking a modest boost but still want fast access and some diversification.

Funds and ETFs are both available through your usual brokerage.

Municipal Short‑Term Bond Funds

Municipal short-term bond funds invest in notes from states, cities, and towns. The main advantage: interest income is usually free from federal taxes and sometimes state/local taxes, depending on where you live.

Who benefits most?

• Investors in higher tax brackets want the extra after-tax return.

• Businesses parked in high-tax states see a clear advantage.

These funds focus on high-grade muni bonds, rated A or above, so default risk is low. You can buy them as mutual funds or ETFs, just like corporate and government funds.

For tax-conscious business owners, this can be a smart way to keep returns up and taxes down without sacrificing much stability.

With these short-term bond and Treasury picks, your cash keeps working even when you need it back quickly. They balance growth, security, and flexibility for businesses that want more than a simple savings account.

Higher‑Yield Alternatives for the Risk‑Tolerant

If you’re open to more risk in pursuit of greater short-term gains, several investment routes could help your business grow its cash a little faster.

These choices aren’t as predictable or protected as government bonds or savings accounts, but they offer the chance for better income, especially if you already have an emergency fund and your operating cash is covered.

Below, you’ll find practical options and smart tactics to limit risk while reaching for those higher yields.

Peer‑to‑Peer Lending Platforms

Peer-to-peer (P2P) lending allows you to lend money directly to individuals or small businesses through online platforms.

In exchange, you earn interest that can outpace most savings or bond options in today’s market. On most leading P2P sites, you act as the bank, picking loans based on borrower profiles, credit scores, and risk grades.

Returns can be attractive, with annual yields for top-rated borrowers sometimes ranging from 5% to 9%. However, you shoulder the risk of borrower defaults and platform failures.

To help manage that, most experienced investors:

• Diversify across dozens of smaller loans instead of putting all their funds in a single note.

• Target only higher-graded loans for more stable returns.

• Reinvest repayments to maximize compounding over multiple short-term cycles.

Strong due diligence and a spread-out loan portfolio can help reduce bigger losses, but never invest money here that your business can’t afford to lose.

Short‑Term Real Estate Crowdfunding

Short-term real estate crowdfunding gives you access to projects like apartment flips, new housing developments, or small commercial renovations.

Many platforms offer deals with 6- to 18-month windows for entry and exit, making them work well for investors who want real asset exposure but need liquidity.

Annualized returns in this area can reach 8% to 12%, but risks are higher, property values, project delays, or developer missteps can eat into profits. To protect yourself:

• Stick with platforms known for transparency and independent audits.

• Assess each project yourself: review location, borrower/developer experience, and the exit strategy.

• Favor deals with short durations and clear business models.

For founders and small business pros new to real estate, these platforms can show you what it takes to enter the commercial real estate market, but always vet each project with the same care as any costly business purchase.

Dividend‑Focused ETFs with Low Volatility

Some dividend exchange-traded funds (ETFs) focus on companies that pay steady income and keep price swings low. While stocks carry more risk than bonds, a diversified ETF with quality, established payers can reward you with a mix of cash and modest growth over 1 to 2 years.

How do you use these for short-term investing?

• Look for ETFs that track indices of dividend “aristocrats” or low-volatility blue-chip companies.

• Choose funds with histories of stable or rising dividends.

• Hold for a defined period (12 to 24 months) and set target prices for taking profits.

This tactic won’t always beat high-yield savings, but it’s a practical way to get some stock market exposure while earning extra income.

Short‑Term REITs

Real Estate Investment Trusts (REITs) specialize in owning or financing income-producing property. Some target short-term commercial leases or mortgage pools, giving you access to predictable rent streams or loan interest with shares you can buy and sell on the open exchange.

For liquidity, public REITs are best, they trade like stocks. Yields vary, but short-term focused REITs can pay 5% or more each year, depending on sector and market trends.

Key tips for using short-term REITs:

• Favor funds invested in commercial mortgages, industrial buildings, or self-storage with rolling leases.

• Keep an eye on payout ratios and leverage.

• Remember, share prices can drop in a weak property market, but liquidity means you can exit quickly if needed.

To learn more about property investing for new business owners and marketers, see our insight on how to start investing in commercial property.

High‑Yield Savings‑Linked Crypto Stablecoins

Crypto stablecoins pegged to the dollar or other major currencies have become popular for earning high interest in a digital setting.

You can deposit stablecoins on select platforms and earn variable yields far above traditional accounts, sometimes 6% to 10% APY, through lending or market-making mechanics.

This comes with unique risks, such as:

• No FDIC coverage if the platform fails.

• Regulatory scrutiny or sudden government crackdowns.

• Smart contract security issues.

If you try this route, spread funds across reputable, established platforms with strong transparency and user protections. Only invest cash you can afford to risk, and never use business-critical money. As regulations shift rapidly, always check the latest news before moving cash into crypto.

Thinking about moving beyond simple deposits? Strong risk management is a must when you chase higher returns from these alternatives.

Still, with careful research and smart diversification, they can play a role in a well-rounded, short-term business cash strategy.

Choosing the Right Short

Before you pick a place for your extra cash, it’s smart to line up your business priorities. Different short-term investments will make sense depending on how soon you’ll need the money, how steady your operations are, and what kind of financial curveballs you might face in the next year. 

Assess Your Liquidity Needs

Start by mapping out known expenses for the next six to twelve months. Include payroll, rent, loan payments, and any expected purchases or seasonal costs.

Next, set aside an emergency fund, at least three months of operating expenses is a safe target for most small firms and startups. Only consider investing funds left over after funding your essential bills and safety net.

Keeping these reserves upfront lets you take advantage of better yields with the rest of your cash, while still having easy access if your revenue dips or an urgent expense pops up.

Plan for flexibility so that unexpected costs never put your business at risk.

Match Risk Level to Business Stage

The sweet spot for risk really comes down to where your business is right now. Early-stage startups often need ultra-safe vehicles, like high-yield savings or Treasury bills.

These protect capital and guarantee access at a moment’s notice.

As businesses mature and build steadier revenue, it becomes possible to shift some funds into higher-yielding options, such as short-term corporate bonds, peer-to-peer loans, or even carefully chosen real estate funds.

Make sure core cash is in protected, highly liquid places, while surplus funds go toward chasing a bit more growth.

Consider Tax Implications

Not all returns are created equal, especially after taxes. Interest earned from high-yield savings accounts, CDs, and money market funds generally counts as ordinary income and will be taxed at your business or personal rate.

In contrast, certain municipal bond funds can offer tax advantages if you qualify, letting you keep more of your earnings.

If your business is eligible to use tax-advantaged accounts (such as a SEP IRA for solopreneurs), consider parking some short-term reserves there.

The right setup can help keep your cash flow strong while trimming your tax bill, always review with your CPA or financial advisor if you’re unsure.

Diversify Across Multiple Vehicles

One of the smartest moves is not to park all your extra cash in a single product. By splitting funds among two or three different short-term options, you balance safety with the chance for better returns. For example:

• Keep core operating reserves in a high-yield savings account.

• Invest surplus cash in short-term Treasuries or a money market fund.

• Try a small stake in higher-yield vehicles, like P2P loans or a real estate crowdfunding project.

This balanced approach helps you stay nimble. If one investment underperforms or rates shift, you aren’t left scrambling.

Diversification spreads your risk, smooths out returns, and can make your business cash strategy more durable no matter what the market throws at you.

Monitor Rates and Rebalance Quarterly

Don’t set and forget your investment mix. Interest rates can shift, new products can appear, and your projected expenses can change each quarter. Mark your calendar to review your short-term holdings at least every three months.

During these check-ins:

• Compare the APYs or yields you’re earning against current market leaders

• Shift funds to higher-yielding or safer options if rates have moved

• Recalculate reserves as your business grows or expenses change

• Review account statements for fees or conditions that could eat into returns

This regular review ensures your money is always working its hardest, ready for new opportunities, and never out of reach when your business needs it most.

Conclusion

Finding the right mix of short-term investments comes down to how quickly you need access to your funds, the amount of risk your business can handle, and your specific growth goals.

The 15 options covered above give you a wide toolkit, from high-yield savings and money market accounts to corporate bond funds and riskier alternatives like peer-to-peer lending or real estate crowdfunding.

Staying flexible with your cash means you can move fast when opportunities arise or cover a surprise expense without stress.

Build your investment plan around your most pressing needs, protect operating reserves, then look for higher yields with surplus cash.

Taking action now helps you get ahead, whether that means reviewing your current reserve strategy or opening a new high-yield account for your business.

Every small business and founder faces different challenges, so adapt these ideas to fit your current situation. If you want to strengthen your investment plan even further, consider exploring portfolio development strategies for small business, which can help you balance growth and protection.

Your next move can make a real difference, start today and shape a stronger financial foundation for the future.