When you are searching for the right investment for your investment goal, the most important consideration apart from 'Risk to your capital' is 'The Investment Term' i.e. the time frame after which you need your money back.

The Rule of Thumb For Different Investment Time-Frames

1. Investment Time Frame - Upto 2 Years: If your investment time frame is less than 3 years, the primary consideration is 'Access to the money' - the best option is to keep your money in the bank in Fixed Deposits or money-market funds. 
2. Investment Time Frame - more than 5 years: If your investment time frame is more than 5 years, you can use the traditional investments vehicles of Stocks, ETFs, Mutual Funds, Real Estate or Commodities, as 'Investment Returns' are the primary concern as opposed to 'Access to the money'.
3. Investment Time Frame - between 3 to 5 years: This is a tough nut to crack because the challenge is to find an Fixed Income Investment that is 'Safe', but also one that gives 'decent returns' over and above inflation, i.e. more than 3% p.a..

Why Bonds May Not Provide the Solution

1. Government Bonds: Decent investment grade government bonds offer upto 3.5% p.a. Government Bonds with lower credit rating offer higher returns, but the risk to the capital is higher as well.
2. Corporate Bonds: This means we have to look at corporate bonds as an option to get returns over and above inflation (3.5% p.a.). Investment grade corporate bonds offer around 4.5% p.a., but need a minimum investment of USD 200,000, which is out of the scope of many investors.
3. Rising Interest Rates & Falling Yields: Rising interest rates in the current environment, reduce the bond yields, thereby making this option even less attractive. And junk bonds are very high risk, thus defeating the purpose.

Euro Medium Term Notes (EMTNs) - A Smarter Choice

1. A Euro Medium-Term Note is a medium-term, flexible debt instrument that is traded and issued outside of the United States and Canada.
2. The principle characteristic of an EMTN programme is its flexibility. This flexibility benefits both the issuer and the investor. Once a programme is established, companies can use an EMTN programme to raise funds when they need it.
3. Investors also benefit from the flexibility of EMTNs. The flexibility of EMTN programmes means that issuers can sell instruments that meet investors’ requirements exactly, for example by issuing debt with a maturity that fits investors’ needs.
4. These instruments require fixed payments and are directly issued to the market with maturities that are up to five years. EMTNs allow an issuer to enter foreign markets more easily to obtain capital. 
5. Firms also offer EMTNs continuously, whereas a bond issue, for example, occurs all at once.
6. It costs less for the issuer of an EMTN than to issue a corporate bond, and borrow money from the market. This also allows the issuer to offer higher annual coupons to the investors.
7. You can invest in an ETMN for as low as USD 50,000 as opposed to USD 200,000 for a comparable corporate bond.