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Cash Investment

A cash investment is a short-term obligation, usually fewer than 90 days, that provides a return in the form of interest payments. Cash investments generally offer a low return compared to other investments. They may also have very low levels of risk, in addition to being insured by the Federal Deposit Insurance Corporation (FDIC).A cash investment also refers to an individual’s or business's direct financial contribution to a venture, as opposed to borrowed money.

Understanding Cash Investments

Cash investments are usually undertaken by investors who need a temporary place to keep their cash while researching other investment products. Investors benefit from the low-risk yield and high liquidity of cash investments. Although interest rates are low and a favorable interest rate can only be locked in temporarily, an investor can have access to their money within a short period of time.

Types of Cash Investments

A cash investment is a short-term obligation, usually fewer than 90 days, that provides a return in the form of interest payments. Cash investments generally offer a low return compared to other investments.