With interest rates having shifted significantly over the past two years, many people are sitting on cash savings and wondering whether they should do more with them. It’s a question we hear constantly — and the honest answer is: it depends on what the money is for.

The case for keeping cash

Cash has real advantages. It’s liquid, predictable, and protected up to R85,000 per institution by the FSCS. For money you might need in the next one to three years — an emergency fund, a planned purchase, or a buffer for the unexpected — cash is exactly the right place for it. Don’t let anyone tell you otherwise.

The mistake most people make isn’t holding cash. It’s holding too much of it for too long, in accounts paying well below the best available rates. If you haven’t reviewed your savings accounts recently, that’s the first thing worth doing.

“The real risk of cash isn’t short-term volatility — it’s the slow, invisible erosion of purchasing power over time.”

When investing starts to make sense

For money you won’t need for five years or more, the calculus changes. Over long time horizons, investing in a diversified portfolio has historically outperformed cash — not every year, and not without volatility, but consistently over decades.

The key word is diversified. We’re not talking about picking individual stocks or chasing last year’s best-performing fund. We mean a structured, evidence-based strategy spread across asset classes, geographies, and risk levels — built around your specific goals and timeline.

What about the risk?

This is where most people pause — and understandably so. Investment values go up and down, and seeing a portfolio fall in value is uncomfortable. But two things are worth keeping in mind.

First, volatility is not the same as loss. A fall in value is only realised if you sell. Investors who stay the course through downturns have historically recovered and grown their wealth over time. Second, doing nothing is also a risk. Inflation at 3–4% annually means that R100,000 in cash today has the purchasing power of roughly R74,000 in ten years. That’s a real cost — it’s just invisible.

So what should you do?

Start by separating your money into buckets by purpose and time horizon. Short-term needs (under 3 years): keep in cash, in the best-rate account you can find. Medium to long-term goals (5 years+): consider whether a structured investment strategy is appropriate. Everything in between: a conversation worth having with an adviser.

There’s no universal right answer — but there is usually a better answer than the default. If you’d like to talk through your specific situation, we’re happy to help.