How do cash investments work?

A cash investment is, like the name suggests, invested in money. That means it’s an easily accessible asset (also known as liquid) that has very little risk of loss. 

There are different cash options available in addition to cash itself – from saver accounts to term deposits and actively managed cash funds. Depending on the option itself, cash can be considered the most defensive asset class. 

In exchange for a lower level of risk, cash also offers a lower potential return compared to higher-risk asset classes like shares.

Cash options are accessed through financial institutions like banks but can also be accessed within superannuation. We has several cash options to choose from:

Note: Please refer to the relevant Product Disclosure Statement (PDS), reference guide and Financial Services Guide before making an investment decision. Fees and costs apply.

Cash investments returns generally come from periodic interest payments. For some options, like a term deposit, the rate of interest may be fixed for a period of time, meaning you will receive the same amount of interest regardless of changes to official interest rates.

Changes to interest rates could impact the interest rate offered for some options, like a savings account or managed fund. Inflation can also reduce the value or buying power of your money – particularly if the rate of inflation is higher than the rate of interest of your cash option. 

Depending on the cash option terms, an investor may not be able to access their funds as and when they need without incurring a fee or a reduction in the interest rate paid to their option.