A question I get asked a lot lately by clients holding backing from investing at the moment is: ‘Where should I keep my cash?’ This is a very good question, and one you should be thinking about not only to try beat inflation, but also for the security of your money.
Cash sitting in a general purpose bank account is incredibly tempting. Not only to you, but also to criminals who are always looking for easy prey. As much as we’d all like to believe we won’t be caught out in a phishing attack or scam, this is happening multiple times a day across the country.
So, why take the risk, is what I always ask.
Here’s why keeping large sums of cash in a current account is a bad idea, and ways that you can lower your risk.
Why some investors are holding cash
The past year has not been kind to investors, leaving many wondering what 2023 will bring. The year started off on a bad note as inflation started rising, especially after the Russian invasion of Ukraine.
Since then, markets across the globe have been in a tough bear market that relies heavily on the inflation picture improving. Which fortunately, it seems to be.
The depressed market has led some clients to sit on the sidelines rather than invest while the market is still in a downward phase. There’s certainly nothing wrong with avoiding the possibility of short-term losses, as long as you have a firm intention of getting into the market at a strategically-timed point.
As we’ve seen time and again, it’s impossible to predict the bottom of the market. And while ‘buying the dip’ is a great strategy, how do we ever truly know we’ve hit rock bottom? We can’t.
So, trying to time the market is never really a good strategy. But holding back capital to deploy at strategic points is.
Where shouldn’t you hold your cash?
If you decide to adopt this strategy, one of the most important questions is: where do I store my cash? If you’re likely to jump onto an opportunity, you might want to keep it in a current account so that it’s always liquid.
This is not a good idea. Firstly, current accounts usually don’t pay interest, so the value of your cash is declining all the time. And, secondly, unsecured cash in your account is a temptation – both to you and to criminals.
Don’t fall into the trap of believing that it’s never happened before so won’t happen in the future. And if that happens, the risk of loss is much smaller if you have less cash available for the taking.
So, I usually advise clients to avoid holding excessive amounts in their current accounts. Which then begs the question: where should you hold your cash reserves? That all depends on your time horizon.
Short-term saving options
A simple savings account is the first option to consider. If you feel the need, you can use an instant access account – like a Call Account – to take advantage of opportunities without any delays.
A simple way to avoid temptation, or the chances of fraud, is to open a joint account on which your spouse or partner must approve transactions.
The obvious appeal of savings accounts is that the interest helps to offset the effects of inflation. So, the better the rate you better you’re able to protect your buying power.
Depending on how disciplined you are, you might want to choose a 30-day notice or fixed-term account if you feel you need some separation between your impulses and your savings
Long-term saving options
If you’re looking at longer-term options – I’d say at least seven years and longer – then you need to sit down and do some proper planning. A simple, or even term, savings account is not the right solution.
I always advise that if you’re looking to the long term then you need to get serious and speak to a financial advisor who can help you find the best solution. With such a long time-horizon it’s usually advisable to have some exposure to the market, even though the market is precisely what you’re looking to stay out of.
You will only find the right answer by sitting down to decide on your priorities and to consider your options. And because there are so many options to consider, sometimes it’s not about finding the ‘best’ option, but the ‘right’ one.
And you have the added peace of mind that your savings won’t be exposed to the greedy fingers of criminal syndicates looking for accounts stuffed with excess cash.
- Maria Smit CFP® professional is an advisor at Brenthurst Pretoria
Megan joined the Brenthurst Wealth team in March 2026 as an Administrative and Fiduciary Services Assistant at our Val de Vie Office in the Western Cape. Prior to joining Brenthurst, Megan gained three years of experience in the retail sector, where she developed management and client service skills.
I obtained my National Diploma in Financial Information Systems from the Cape Peninsula University of Technology in 1999 and have worked in the wealth management industry since January 2000. Over the years, I have gained extensive experience in various roles, including Portfolio Manager Assistant, Planner Assistant, and Paraplanner.
Esmarelda Isaacs-Andreas joined the Brenthurst Wealth Stellenbosch office in October 2025, taking on the dual role of Receptionist and Fiduciary Administrator.
I obtained my National Diploma in Financial Information Systems from the Cape Peninsula University of Technology in 1999 and have worked in the wealth management industry since January 2000. Over the years, I have gained extensive experience in various roles, including Portfolio Manager Assistant, Planner Assistant, and Paraplanner.
Ashley joined Brenthurst Wealth in January 2025 as Office Administrative Assistant and Receptionist for the Stellenbosch Office.
René Heystek joined Brenthurst Wealth in November 2023, as receptionist and administrative assistant in the newly established George/Garden Route office.
Michelle Heystek has built a career in the financial services over the last two decades, after obtaining her B.Com degree in Financial Management in 2005. Once she joined Brenthurst in 2006, she continued her academic journey, obtaining her Certificate in Wealth Management from INSETA in 2007, followed by a Postgraduate Diploma in Financial Planning from the University of the Free State. In 2008, she earned the Certified Financial Planner (CFP®) designation.
Anelle joined Brenthurst Wealth as a Receptionist and Administrative Assistant to Brian Butchart in the Cape Town office in December 2023. She has a wealth of knowledge from working as a liaison between Financial Advisers and clients at TMA and Absa Investment Management Services (Aims) since 1998. She obtained her B. com degree from the University of Port Elizabeth in 1997.
ADMITTED ATTORNEY | FINANCIAL PLANNER & HEAD OF BRENTHURST FOURWAYS
Sanet was appointed in April 2020, joining our Cape Town team as an Executive Administration Assistant to Renee Eagar. She has been in the financial services industry since 1990. Her previous experience includes positions at Sanlam, BJM and ABSA. She spent her last 12 years working at Alexander Forbes Private Client Wealth as a Senior Wealth Management Assistant. She has received numerous accolades over the years which include but not limited to, Alexander Forbes Client Service Excellence – Silver award in 2014,2015 and 2017. Sanet has also obtained her Certificate in Wealth Management (NQF 5) in 2012 and achieved “Best Student of the Year” from Moonstone.
Maria Smit is a Certified Financial Planner® with over 10 years of experience in the financial planning industry.
