Most of us think of the money we carry in our wallets as cash, and
that’s it. Cash, though, has a broader definition than just the coins
and bills we use to pay for goods. It is also the type of investment
characterized by a high level of liquidity and little to no risk to your
original investment. Generally, cash investments are short-term, interest-bearing securities that offer investors the opportunity to collect a specified interest
rate, keep a high level of security and maintain liquidity with their
money. The most commonly used cash investments are bank savings
accounts, certificates of deposits (CDs), and money market funds.
Some employer-sponsored retirement plans may offer guaranteed
investment contracts, which are another form of cash investments.