It has not been an easy start to the year. Stocks were down almost 16% in the first half of the year and inflation has made a return to double digits. In addition, treasury bill interest rates have dipped, further affecting the returns of investors.

The rest of the year is looking very uncertain. Covid-19 is still rampant and health facilities are stretched. In addition, there is an election coming up. To make the political risk even more pronounced, a new voter’s register which the opposition and civil society opposed is being compiled.

So in such a volatile situation, where should one put some loose cash. For the purpose of this article I will define loose cash as funds which are not meant for any specific purpose. This means that funds left over after allocations to pension, investment, savings, an emergency fund and expenses.

At this point you should already have a portfolio designed to fit your financial profile (if not then send an e-mail to jerome[at]ceditalk[dot]com so I build one for you) which you should maintain. Note that if you do not already have a portfolio then you do not have loose cash.

But if you do have some loose cash, here are some of the best places to put it.

1. 91-day Treasury Bills. Yielding about 13% per year at the moment, this fixed income product comes with no risk and is highly liquid (that it means you can pull out your money with little advance notice.
2. Fixed Deposit/Term Deposit. This is when a financial institution offers to keep your money for a fixed term at a fixed rate of interest. The interest rate differs from firm to firm and it is less liquid than a treasury bill but it’s still a good place to park loose cash.
3. Money Market Fund. A money market fund differs from a fixed income fund in that there are fewer exit fees or less restrictions to exit. This option works best if your loose cash is not a lump sum but small cash that you get from time to time. The fund will allow you to accumulate your money over time as opposed to treasury bills or (most) fixed deposits where you cannot top up.
4. Specialized Savings Accounts. Many commercial banks in Ghana now offer specialized savings accounts offering higher interest with restrictions on withdrawal. Ask your bank what offer they can give you apart from the regular savings or current account.
5. Susu Box/Piggy Bank. No nominal returns but at least you’re saving for a rainy day.

In conclusion, do not let the loose cash investment options derail your plans to build a long-term portfolio. However, if you have followed your investment plan and you want to avoid blowing loose cash, you should definitely consider the options I listed.