Where best to invest R1.1m

MERIT: MONEY MARKET V BALANCED UNIT TRUST

- Nerina Dreyer

The question: What would be the best investment option for R1.1 million?

Is it wiser to save it in a money market account earning 7.3% interest per annum, or invest it in a balanced unit trust fund? Assuming a time horizon of around five years, which option makes more sense?

The answer: Thank you for your question. It's a very relevant one, especially in the current investment climate.

While money market accounts may look attractive right now at around 7.3% per annum, we are likely moving into a lower interest rate environment.

Over a five-year period, the decision between keeping funds in cash or investing in a balanced unit trust really comes down to what you want to achieve and how much risk you are comfortable taking on.

Let's unpack the two options across a few important considerations:

1. Liquidity

Money market products are generally highly liquid, although this depends on the specific type of investment you choose.