Is now the time to fix your cash investments?

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August 26, 2009

Although sentiment in global financial markets is gradually improving, recent uncertainty has led investors to look for opportunities beyond property and stocks which can bring diversity to their portfolio, helping to minimise risk and balance the effect of market ups and downs.

To achieve this, many investors have allocated a portion of their portfolio to fixed interest investments. Options within this portion of a portfolio might include fixed interest securities and also fixed interest cash investments, such as term deposits.

Despite low interest rates and talk of value re-emerging in the sharemarket, there are still some attractive cash investment opportunities that offer a variety of terms and rates to choose from.

Term deposits can play an effective role in the fixed interest portion of a portfolio and attractive rates are still on offer from a number of financial institutions across a range of different terms. However, investors should be aware that the cash deposited will be locked away for the full term and breaking that term involves a break cost.

At this time, weighing up the importance of the interest rate against the importance of accessing the funds at short notice can be a balancing act for investors. In most cases, the preference over rate or access will depend on their personal view of the market, while risk profile and portfolio allocation preferences are important considerations too.

A good solution to this might be to select a range of maturities and vehicles that suit your needs. For example taking a portion of cash you are happy not to access for a period of time and put this in a high interest term deposit, then choose an online savings vehicle or cash management account for another portion which you can access, but also accrues a good level of interest.

There are a diverse range of fixed interest options available to meet your investment goals. By comparing the different savings opportunities currently on offer, you could watch your money grow much faster by switching to a better deal.

To compare some of today's best term deposit rates visit RateCity Term Deposits.


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