Earn interest on uninvested cash

TIPS: HOW NOT TO MISS OUT ON GOOD RETURNS

- Maboko Seabi

Many investors keep uninvested cash in their portfolios while waiting for the right opportunities. However, instead of letting this money sit idle, there are ways to let it earn competitive interest and generate returns. Here are various options.

1. Savings accounts

How they work:

Banks offer interest-bearing savings accounts where funds remain accessible.

Interest is typically compounded daily or monthly and credited to the account periodically.

Key benefits:

Liquidity: Easy access to funds when needed.

Low risk: Deposits are usually insured by the bank.

Average interest rates range from 4% to 8% per annum.

Who should consider this?

Investors who keep cash reserves for short-term needs.

Individuals who prefer low-risk, flexible interest earnings.

2. Fixed deposit accounts

How they work:

A fixed deposit (FD) account locks funds for a set term (three months, one year, five years) in exchange for higher interest rates.

The longer the term, the higher the interest earned.