Getting the Best Possible Income from Your Cash Savings

How much is enough to provide diversification and liquidity while lowering the volatility of a portfolio? And how can you ensure that the little interest you earn is not eroded by inflation?

Kara Gammell 8 October, 2015 | 8:30AM
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This article is part of Morningstar’s Guide to Income Investing. Whether you are looking grow your pension pot, or invest for retirement income, this week we have all the news, information and education you need.

It may feel counter-intuitive while interest rates are so low, but holding cash is an essential part of any investment strategy. Financial experts agree that people should put aside a minimum of three months of earnings to cover themselves in case of an emergency such as job loss, but how much cash should investors actually hold?

How much is enough to provide diversification and liquidity while lowering the volatility of a portfolio?

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About Author

Kara Gammell

Kara Gammell  is a freelance journalist and author, specialising in personal finance and consumer issues, writing for Morningstar.co.uk

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