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The right way to invest your rainy day cash

When thinking about where to park some additional money, the first decision is whether to go no, low or high risk.

This is all relative to your risk profile, which differs from investor to investor. A risk profile takes into account how comfortable you are with losing money, how long you plan to invest your cash and what your investment goals are.

Lower risk options include bank accounts and term deposits. These are choices you can bank on and they offer returns safe from market volatility.

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The ME Online Savings Account is 100 per cent fee free and interest is calculated daily and paid monthly. The current variable base rate is 2.5 per cent per annum and the savings plus bonus rate is 1.35 per cent per annum for the first 4 months on balances up to $250,000. The fixed bonus rate is available to those who open their first ME Bank Online Savings Account before 1 May 2015, and link it to an ME Bank EveryDay Transaction Account within the first 14 days.

Piggy bank with hammer

Don’t smash the pig just yet. Be wary of high returns or get rich quick schemes

The ME Term Deposit offers shrewd investors a secure way of growing their savings. If you’re happy to put your money away for a fixed term, a term deposit means you can look forward to a guaranteed interest rate at term maturity. Minimum deposit starts at $1000 for terms from one month to five years. To discover how much you can benefit from a term deposit, visit the ME Term Deposit Calculator.

A low risk investment option is Australian Government Bonds, which offer investors a predictable cash flow paid at regular intervals. Those who want to stash their cash safely may also consider investing more into their super funds, which can be geared to low or high risk.

At the other end of the spectrum, high-risk investments may include share market stocks, property and gold.

Each of these investment methods offer different terms for vastly different returns and can be researched at the Australian Securities and Investments Commission’s MoneySmart website.

Before you decide where best to invest your hard-earned, a word to the wise. Be wary of products promising high returns or get rich quick schemes. Always read the Product Discloser Statement (PDS) in detail and check the company you are investing with is regulated by the Australian Prudential Regulation Authority (APRA). MoneySmart also has a helpful list of unlicensed companies.

Most importantly, do your own due diligence and research your options thoroughly before investing.


This content was sponsored by ME. Conditions, fees and charges apply. Consider if these products are appropriate for you. For more information, go to mebank.com.au or click the logo below:

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