Cash and other Fixed Interest products can be broadly characterised by investments that pay a regular cash income stream without the level or risk or volatility of higher risk asset classes such as direct shares and property.
The most common reasons for investing in cash or fixed interest investments are that they offer;
- A regular and predictable income stream;
- Diversification; and
- Capital preservation.
Fixed income investments may also allow you the opportunity to match fixed returns and maturity dates to your specific cash flow requirements in retirement.
While these investment types offer a regular income stream plus less risk, generally returns from cash and fixed interest investments are lower than direct shares or property over the long term.