Cash
What are cash investments?
Cash investments are designed to protect your money while offering a fixed or variable interest rate. Most people have cash investments in the form of deposit accounts that pay a regular interest and enable you to access your money at short notice. They are one of the safest forms of investment; however the buying power of your money could be eroded by the effects of inflation.
Types of cash investments
In addition to bank and building society deposit accounts, cash investments include National Savings accounts and Certificates of Deposit and Treasury Bills. These investments are generally used by banks and other institutions to raise short-term finance or to deposit short-term funds.
The role of cash in a portfolio
Although returns are generally lower cash works well as part of a diversified portfolio as it can offset the volatility of other asset classes such as shares therefore reducing the overall risk of your portfolio.
Benefits
- Low risk
- Competitive interest rates
- High level of security
- Capital Guarantee
- Transparent
Drawbacks
- Low returns
- No capital growth
- Buying power can be eroded by inflation
- Open to default risk
To find out what type of investment is best for you, it’s important that you understand your attitude to risk.
Visit the Guide to Investing and Risk pages to find out more or take our simple questionnaire and see examples of the types of funds that may meet your needs.
Assess your attitude to risk - take our questionnaire
To find out more about any of
the services we’ve mentioned
simply:
- Contact your SFS Financial Adviser
- Call a member of our Client
Help Line on 0800 137 832 - Visit your local Skipton
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arrange an appointment with
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