We all like to make our investments work hard and earn good returns, but it may not always suit your situation to commit funds to long-term growth investments, such as property or shares. Sometimes you need to invest in a way that keeps the funds relatively accessible and your capital secure.

If this strikes a chord with you, then here are our top tips on where you can stash your cash.

1. The biggest return with no risk
For some of us the best place to get a huge risk free return is not through any savings or investment plan at all. If you have consumer debt in credit cards or high interest personal loans, they may be the best option for any spare cash you have to put away. If you think about it, a credit card with an 18%+ interest rate is effectively giving you an 18%+ tax free return on every dollar you put into paying it off. There are very few investments of any kind that could match that return, so before you start looking at any investment plan you should consider your debt situation.

Of course, it may not be prudent to put all your spare cash into debt repayment and leave you with no ready funds on hand, but striking a balance by paying down some of your high interest debt may make a lot of sense.

2. High interest saving accounts
Most banks will offer some form of high interest savings account, which can be ideal if you want a simple option that doesn’t tie your money up too much. If you currently have a reasonable lump sum sitting in a transaction account with little or no interest being earned, then switching at least some of it into a high interest savings account could be a great idea.

Online savings accounts are widely available now and these are easy to set up and often offer you bonus interest just by sticking to a few simple rules on things such as how often you access your funds. Shopping around to get the best rates on such accounts is well worthwhile, but be conscious of the fees involved when making comparisons.

3. Term deposits
Term deposits generally offer a step up in interest rates compared to savings accounts, but in exchange you need to commit your funds to a set period in order to achieve that rate. Terms can vary from 1 month to 5 years and the longer term, the higher the interest.  If you do need to get your hands on the cash prior to the term expiring, then you will probably forfeit some of the interest.

4. Cash management funds
Managed funds are a type of investment that involve pooling your money with other investors to achieve the ‘buying power’ that can enable the fund manager to source a wider range of investments and potentially better returns. Some managed funds will invest in purely cash based investments, such as bonds and fixed interest. These cash management funds give you a good level of capital security, plus the advantage of the fund manager’s expertise and research capabilities to source good returns across a diverse range of opportunities.

These funds may involve some form of management fee, but can give you the benefit of a more sophisticated approach for your cash investment.

5. Government and corporate bonds
Bond investments are effectively a loan you are making to a government or a corporation based on an agreed term and fixed interest rate. Government bonds carry a high degree of capital security, but interest rates may only be modest. Corporate bonds may offer better interest and are relatively secure investments, but they do carry some degree of risk, albeit generally less risk than buying shares in a company.

Corporate bonds can also be traded on stock exchanges, giving you the opportunity to make capital gains as well as interest income. If, for example, you are holding bonds during a period where interest rates are dropping, the interest rate payable on your bond may be end up being higher than what is generally available elsewhere. This makes your bond more desirable to other investors who are willing to pay a premium on the face value of the bond in order to obtain the higher interest rate that it offers.

Selecting the right cash investment for you
If you have a significant amount of money to invest in cash investments, or are concerned about maximising your returns, it may be wise to consult a financial adviser who can help you assess your needs and recommend the best type of cash investments to suit your objectives. This may involve a combination of the options mentioned above.

What are your thoughts on the best cash investments? Share your ideas below.

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