We have all been taught that the bank is the best place for your money. It is safe and it will be looked after. Did you know that the banks want your money so that they can lend it to other people and make money on it – more than they are making!
Are banks really safe? Some people in the USA would not agree with this when their bank went under taking their hard earned cash with them.
Now I am not saying that banks are bad – just to be aware that there are other options out there if you are seeking higher returns on your cash. If you are putting your money on a term deposit – the rates that you will achieve vary slightly with the major banks however not a lot - maybe one or two decimal points.
If you look further to building societies and community banks then the rates tend to be higher. The laws governing them are the same and they are considered just as safe as the banks.
The next level to look at is what is called secured debentures – these give you a higher interest rate and you are really investing cash into a business or finance company which will secure your investment. These pay higher rates than the banks and if you have good cash reserves the interest difference can be significant in terms of dollars received.
As with all investments , a greater return comes from more risk that is involved, however, you are able to find very secure debenture investments in every financial market.
It is all about how effectively you wish your money to work for you and what your risk profile is. Everyone is at a different stage of their lives and has a different ability to earn money. You may be just starting out and be prepared to take a slightly higher risk and therefore you will be able to take advantage of investments with a slightly risker profile.
All in all – look at what options are available to you and compare rates across all the financial institutions for a similar term.
Here is a fun quiz to help you determine what your risk profile may be!