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What Is The Difference Between Short-term, Long-term And Intermediate Funds?

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Mehreen Misbah Profile
Mehreen Misbah answered
Normally capital funds from operating flow is a general cause of distress for most small businesses. Sometimes there is an overlap between capital funds and operating funds. Ergo the entrepreneur should clearly demarcate the funds and furthermore prevent himself from abusing the category of any funds. For this purpose, there are three types of funds, which are classified in the following categories.

Short-term funds are usually repaid within one year. And normally these funds are used for operating purposes, more precisely day-to-day operations like inventory replenishment, funding receivables etc.

Intermediate funds have a repayment period of more than one year and less than five years. These funds are used for bigger expenditures like capital equipment or inventory transaction.

Long-term funds is the last category and has the longest period of repayment. In compatibility with its name, the funds are used to finance buildings, expansion or projects other than day-to-day operations.
Divya Rao Profile
Divya Rao answered

Short Term Fund: Is an Investment option where your investment matures within a time span of 15 to 91 days or less.

Long Term Fund: As the name suggests is a long term investment plans. Some of the advantages of long term investment are:

i. Attractive Returns

ii. Tax Benefits

iii. Liquidity

Intermediate Funds: Is an an fixed income fund plan which guarantees return within 2-10 years of time. Its better to have a in-depth understanding on how mutual funds work, before you decide to invest on any of these types.

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