Cash Investment

  

Cash investments are short-term, low-interest investments, like savings accounts or government bonds. That is, you are investing cash IN cash to get a tiny bit of interest in return for renting your dough. Low interest. Low risk. Safe.

In most cases when you're buying, say, a money market account, the cash you invest is insured by all kinds of government entities. At a bank savings account, it's usually FDIC insured.

For example, consider a small, freshly opened, donut and coffee shop. They're a new business, so they might not be able to estimate their costs accurately at the time of the grand opening. They don't have the experience just yet to be able to predict random things that might affect their supplies. In corporate parlance, a cash investment runs counter to an equity investment, where one company uses its stock (usually public so a value is easily assessed) as an investment in a strategic partner to make their interests more easily financially align.

A cash investment stays liquid, so if the company needs cash, they can get it easily.

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