Where is the best place to invest surplus company cash?
19 March 2021
Question by Steve
Where is the best place to invest surplus company cash? Our "normal" bank deposit account pays little or no interest.
Answered by Adam Johnson
It is difficult to answer your question without really knowing what your timeline would be for when you want access to the funds. The point of having cash is that it is a low risk, easy access fund that can meet any short term financial needs and cover any short term gaps in your cashflow. As a longer term investment strategy, as you have identified plainly you are not going to necessarily see very good returns and in real terms the impact of inflation is likely to make the buying power of your money left on deposit worth less over the medium to long term.
However without knowing when you need to access this money it is quite hard to give a definitive answer. Whilst I am aware there has been some issues in accessing premium bonds as quickly as they ought to be during the pandemic my general view is that premium bonds at least offer a modicum of excitement in so far as you may win a prize and the average prize yield should at least be comparable to the bank account interest rates you are currently getting. If your investment horizon is longer term, say the next 0 to 5 years then you can start looking at other investment opportunities and the best answer here is to engage with financial advice to work out what your investment horizon is and what your investment objectives are. It is hard to give a definitive answer because any direction is a good direction if we do not know the destination.
Helping deliver client outcomes is at the heart of everything Adam does. Helping clients achieve their dreams is what motivates Adam as a financial adviser, and he takes great pride in the way he has helped so many families over two decades of providing financial advice, and fifteen years running his own practice.