Navigating Your Finances: The Best Ways to Invest Money in Australia for 2025

Saving some cash each month is a good habit, no doubt. Your money can grow over time, especially with compounding interest. But with all the noise about quick riches, the RBA’s uncertainty, and global economic wobbles, figuring out the best ways to invest money in Australia for 2025 can feel a bit much. While your super and home are big investments for many Aussies, they aren’t always easy to access or manage. Let’s look at some other options that might help your money grow beyond just sitting in a savings account, and consider what risks and rewards come with them.

Key Takeaways

Term deposits offer fixed interest rates for a set period, providing predictable returns but limiting access to your funds.
Shares allow you to own a piece of a company, offering potential for capital growth but also carrying higher risk and volatility.
ETFs and Managed Funds pool investor money to buy a basket of assets, simplifying diversification across various investments like shares or bonds.
Property can generate rental income and capital growth, but requires significant upfront capital and ongoing costs, making it less accessible for some.
Gold and Commodities can act as diversifiers or hedges against inflation, though they don’t generate regular income and their value can fluctuate.

1. Term Deposits

Term deposits are a pretty straightforward way to put your money to work if you’re not keen on taking big risks. Basically, you agree to leave your money with a bank for a set period, and in return, they give you a fixed interest rate. The longer you lock your money away, generally the better the interest rate you’ll get. It’s a bit like a savings account, but you can’t just dip into it whenever you feel like it. This lack of easy access can actually be a good thing if you’re trying to save for a specific goal and tend to spend impulsively.

Here’s a quick rundown of what to expect:

Fixed Term: You choose how long your money is invested, from a few months to several years.
Fixed Interest Rate: The rate is set when you open the account and won’t change, no matter what happens in the market.
Low Risk: Your initial investment is generally safe, as they’re offered by banks.
Limited Access: You usually can’t withdraw your money early without a penalty.

When comparing options, it’s worth checking out what different banks are offering. For instance, as of late 2025, you might find competitive rates for a 12-month term, which could be a good balance between earning potential and not locking your money away for too long. It’s always a good idea to compare options before you sign up to ensure you’re gaining the greatest return on your investment, with minimal fees, through a provider that you’re happy to support with your nest egg.

While term deposits offer predictable returns, it’s important to remember that the interest earned is often simple interest, not compound interest. This means you earn interest only on your initial deposit, not on the accumulated interest. You can, however, often roll over your balance at the end of the term to start earning interest on your interest, effectively compounding your returns over multiple terms.

Minimum investment amounts can vary, but many banks require at least $1,000 or $5,000 to open a term deposit. Some providers might offer slightly better rates if you’re depositing a larger sum or committing to a longer term. It’s a solid, no-fuss option for money you won’t need access to in the short term.

2. Cash

When thinking about where to put your money, cash might seem a bit… well, boring. But don’t dismiss it entirely. It’s the bedrock of any financial plan, offering a safe harbour for your funds. Keeping some cash readily accessible is super important for those unexpected bills or sudden opportunities.

While it won’t make you rich overnight, cash in a savings account or a term deposit provides stability. You know exactly what you’ve got, and it’s not going to vanish because the stock market had a bad day. Plus, with interest rates doing their thing, even your everyday savings can earn a bit of extra dough.

Here’s a quick look at how you might hold cash:

Everyday Savings Accounts: Good for daily access, but usually offer the lowest interest rates. Think of this as your immediate spending money.
High-Interest Savings Accounts: These offer better rates than standard accounts, often compounding daily. They’re still easily accessible, just maybe not instant access like your everyday account.
Term Deposits: You lock your money away for a set period (e.g., 3, 6, 12 months) for a fixed interest rate. The longer you lock it, the better the rate usually is. Just remember, you can’t touch it without penalty until the term is up.

Holding cash is about security and immediate needs. It’s the safety net that lets you sleep at night, knowing you can cover emergencies without having to sell investments at a bad time.

For example, you might find term deposit rates hovering around the high 4% mark for a 12-month term, which isn’t too shabby when you compare it to some other options, especially if your main goal is just to keep your money safe and earn a little bit on it. Some platforms even let you invest in Treasury Bills, which are short-term government debts, offering a yield that can be quite competitive, and you can usually access your money pretty easily.

3. Fixed Interest

Fixed interest investments are a bit like a loan, but in reverse. You lend your money to an entity – like a government or a company – and they promise to pay you back with interest over a set period. Think of it as a more predictable way to earn a return compared to, say, shares.

These investments are generally considered less risky than shares because the interest payments are usually fixed and known in advance. However, they aren’t completely risk-free. The main things to watch out for are interest rate changes and inflation. If interest rates go up after you’ve bought a fixed-interest investment, the value of your existing investment might drop if you need to sell it before it matures. Inflation can also eat into your returns, meaning your money might not buy as much in the future as it does now.

Here are some common types of fixed interest investments you might come across in Australia:

Government Bonds: Issued by the Australian government or state governments. These are generally seen as very safe because governments are unlikely to default on their debts.
Corporate Bonds: Issued by companies. The risk level here can vary a lot depending on the company’s financial health. A strong, stable company will offer lower interest rates than a company with a shakier financial standing.
Term Deposits: While often grouped with cash, these are technically fixed-interest products offered by banks. You lock your money away for a set term (e.g., 6 months, 1 year) and get a fixed interest rate.
Treasury Bills (T-Bills): These are short-term debt instruments issued by the government, usually with maturities of less than a year.

When considering fixed interest, it’s important to match the investment’s term to your financial goals. If you need access to your money soon, a short-term option is better. If you’re looking for steady income over a longer period, longer-term investments might be suitable, but remember the increased risk if interest rates change.

For many investors, fixed interest plays a role in balancing out the riskier parts of their portfolio. It’s about finding that sweet spot between potential returns and the safety of your capital.

4. Shares

Buying shares means you’re buying a tiny piece of a company. Think of it like owning a slice of a pizza – the bigger the slice, the bigger your stake. In Australia, you can easily buy shares in big Aussie companies like Woolworths or BHP, or even international giants like Apple or Amazon, all through online trading platforms. You don’t need a massive amount of cash to start, either; a few hundred dollars can get you going.

People buy shares hoping the company will do well, which means the share price goes up. If you sell your shares for more than you paid, that’s your profit. It’s a classic growth investment strategy. The idea is that the value of your investment grows over time as the company expands and becomes more profitable.

However, it’s not all smooth sailing. Share prices can bounce around a lot day-to-day. What you paid for your shares might be more or less than what they’re worth at any given moment. This means your investment value can go up and down.

Here’s a quick rundown of what to think about:

Potential for Growth: Companies can grow, and their share prices can follow. This is the main draw for many investors.
Dividends: Some companies share their profits with shareholders. These are called dividends, and they can provide a regular income stream, often paid quarterly.
Market Volatility: Share prices are influenced by all sorts of things – company news, economic changes, and general market sentiment. This means your investment value can change quickly.
Ownership: As a shareholder, you technically own a part of the company. While you won’t be making day-to-day decisions, you do have a say in certain company matters, like voting at annual general meetings.

Investing in shares means you’re taking on a bit more risk compared to, say, a term deposit. The value can drop, and you could lose money. It’s important to do your homework on the companies you’re considering and understand that the market doesn’t always go up. Diversifying your investments across different companies and industries can help spread that risk around.

5. Exchange-Traded Funds (ETFs)

Exchange-Traded Funds, or ETFs, have really taken off in popularity, and for good reason. Think of them as a way to buy a whole bunch of different investments all at once, without having to pick each one yourself. They’re kind of like a mix between shares and managed funds.

Basically, an ETF pools money from lots of investors and then uses that money to buy a basket of assets. These assets could be shares in different companies, bonds, commodities, or even a mix of things. Many ETFs in Australia are designed to track a specific market index, like the ASX 200, meaning their performance will generally mirror that index.

Here’s a quick rundown of why they’re a go-to for many:

Diversification made easy: Instead of buying shares in just one or two companies, an ETF gives you exposure to dozens or even hundreds of them with a single purchase. This spreads your risk around.
Lower costs: Generally, ETFs tend to have lower management fees compared to actively managed funds because many are passively managed, meaning they just track an index rather than trying to beat it.
Flexibility: You can buy and sell ETF shares on the stock exchange throughout the trading day, just like regular shares. This means you can react to market changes pretty quickly.
Transparency: You usually know exactly what assets are held within an ETF, so there are no big surprises.

The main idea behind ETFs is to make investing in a diversified portfolio accessible and affordable.

Keep in mind, though, that like shares, you’ll typically need to pay brokerage fees when you buy or sell ETFs. Also, the minimum investment is often around $500, as they’re traded in parcels similar to shares.

While ETFs offer a straightforward way to get broad market exposure, it’s still important to understand what you’re investing in. Different ETFs track different things, and their performance will depend on the underlying assets. Doing a bit of homework on the specific ETF’s holdings and its expense ratio is always a good move before you commit your cash.

6. Managed Funds

Managed funds, sometimes called mutual funds, have been around for a while, even before ETFs popped up. Basically, you pool your money with a bunch of other investors, and a professional fund manager takes that big pot of cash and invests it in a mix of assets. Think shares, bonds, maybe even some property – whatever they reckon will do well.

The big idea here is to get access to professional investment management without having to pick every single stock or bond yourself. It’s a way to spread your money around (diversify) and hopefully get better returns than you might on your own, especially if you don’t have heaps of time or knowledge.

Here’s a bit of a breakdown:

Active Funds: A manager actively picks investments they think will outperform the market. This takes skill, and you’ll usually pay more for it.
Passive/Index Funds: These funds just try to match the performance of a specific market index, like the ASX 200. They’re generally cheaper because there’s less active decision-making.
Diversification: Managed funds are often a good way to get a wide range of investments in one go, which can help lower your overall risk.

One thing to keep in mind is the fees. Because you’re paying for that expert management, managed funds often have higher annual management fees compared to something like a passive ETF. You’ll also want to check the minimum investment amount, as some funds have higher entry points than others.

While managed funds offer a convenient way to access professional investment strategies and diversification, it’s important to understand the fee structure and the fund’s investment objectives. Not all managed funds are created equal, and the performance can vary significantly depending on the manager’s skill and the fund’s strategy.

7. Listed Investment Companies/Trusts (LICs/LITs)

Listed Investment Companies (LICs) and Listed Investment Trusts (LITs) are a bit like ETFs in that they offer a way to invest in a basket of assets, but they’re structured a little differently. Think of them as companies or trusts that pool money from investors to buy a portfolio of shares or other investments. You buy shares in the LIC or LIT itself, and its value then reflects the performance of the underlying investments it holds.

There are over 100 LICs and LITs available on the ASX, so there’s a fair bit of choice. The main difference between an LIC and an LIT often comes down to how they’re taxed. With LICs, the company pays tax on its profits before distributing dividends to you. LITs, on the other hand, pass on the income and capital gains to you on a pre-tax basis, meaning you’re responsible for paying the tax on those earnings.

Here’s a quick rundown of what to consider:

Diversification: Like ETFs, they spread your money across various assets, reducing the risk compared to picking individual stocks.
Professional Management: The portfolio is managed by professionals, which can be a big plus if you don’t have the time or inclination to manage your own investments.
Tax Differences: Be aware of the tax implications – LICs tax profits at the company level, while LITs distribute income pre-tax.
Trading: You can buy and sell shares in LICs and LITs on the stock exchange, just like regular company shares.

Investing in LICs or LITs can be a good way to get exposure to a diversified portfolio without having to pick individual stocks yourself. Just make sure you understand the fee structures and the tax treatment before you jump in.

When looking at LICs/LITs, it’s worth checking out their historical performance, the types of assets they hold, and the management fees. Some focus on specific sectors or regions, while others are more broadly diversified.

8. Real Estate Investment Trusts (REITs)

So, you’re keen on property but the thought of buying a whole building, dealing with tenants, and all the upkeep sounds like a bit much? That’s where Real Estate Investment Trusts, or REITs, come in. Think of them as a way to get a piece of the property market without actually owning a physical property yourself.

REITs are basically companies that own, manage, or finance income-generating real estate. This could be anything from apartment blocks and shopping centres to office towers and industrial warehouses. When you buy into a REIT, you’re essentially buying shares in that company. This means you get a slice of the rental income and any capital growth from the properties they hold.

One of the big draws for REITs is that they’re legally required to pay out at least 90% of their taxable income to shareholders as dividends. This can mean a pretty regular income stream for you, often paid out quarterly, but sometimes monthly or yearly depending on the specific REIT.

Here’s a quick rundown of what REITs can offer:

Diversification: They give you exposure to a range of properties, often across different sectors and locations, which can spread your risk.
Income Potential: The mandatory dividend payouts can provide a steady stream of income.
Liquidity: Unlike physical property, REIT shares are traded on stock exchanges, making them easier to buy and sell.
Professional Management: The properties are managed by experienced professionals, so you don’t have to worry about finding tenants or fixing leaky taps.

Investing in REITs offers a way to participate in the property market’s potential returns without the usual headaches of direct ownership.

Of course, like any investment, REITs aren’t without their risks. The value of REIT shares can go up and down with the stock market, and they’re also influenced by changes in the property market and interest rates. If interest rates climb, for example, it can make borrowing more expensive for the REITs and potentially impact their profitability and your returns.

REITs are a bit like buying a share in a big property portfolio. You get the benefits of property investment, like rental income and potential growth, but without the hassle of being a landlord yourself. They’re traded on the stock market, so they’re easier to get in and out of than a physical building.

9. Property

Buying property to rent out can be a good way to make money, but it’s not always straightforward. You’re looking at a big chunk of cash for a deposit, and then there are the ongoing costs like loan repayments, rates, and keeping the place in good nick. Plus, finding tenants and making sure they pay on time can be a bit of a headache.

The big appeal is that property values can go up over time, and you get regular rent coming in. But, and it’s a pretty big ‘but’, things can also go the other way. Property prices can drop, and sometimes it’s hard to find someone to rent your place, especially if the economy’s a bit shaky.

Here are a few ways people get into property investment:

Buying a rental property outright: This is the classic way. You buy a house or unit, find a tenant, and collect the rent. You’ll need a decent deposit and a mortgage, usually.
Using fractional ownership platforms: Services like BrickX let you buy small pieces of a property. It means you don’t need a massive deposit, but you only get a slice of the rent and any profit if the property sells.
Investing in REITs (Real Estate Investment Trusts): These are like managed funds for property. You buy shares in a company that owns and manages a bunch of commercial properties, like shopping centres or office blocks. It’s a way to get exposure to property without the hassle of being a landlord yourself.

Before you jump in, really think about your budget. Can you handle the loan repayments if the property is empty for a few months? What about unexpected repairs? It’s not just about the purchase price; there are always extra costs involved.

It’s worth comparing home loans specifically for investors, as the rates and features can differ from owner-occupier loans. Some lenders might offer better deals if you have a larger deposit, and remember to factor in things like stamp duty and legal fees when you first buy.

10. Cryptocurrencies

Cryptocurrencies are a bit of a wild card in the investment world, aren’t they? You hear stories about people making a fortune overnight, but then you also hear about others losing their shirts. It’s definitely a space that moves fast and can be pretty exciting, but it’s not for the faint of heart. The value of these digital assets can swing wildly based on news, social media trends, and general market sentiment.

When you’re thinking about getting into crypto, it’s super important to do your homework. Don’t just jump in because your mate told you about some hot new coin. Try to understand the technology behind it and what problem it’s trying to solve. If you can’t figure out how it works, it’s probably best to steer clear. Some popular ones to look into include Bitcoin and Ethereum, but there are thousands out there, each with its own quirks. You can even buy fractions of coins, so you don’t need a massive amount of cash to start.

Here are a few things to keep in mind:

Volatility: Prices can go up or down dramatically in a short period. Be prepared for this.
Regulation: The rules around crypto are still developing, which can add another layer of uncertainty.
Scams: Unfortunately, there are plenty of dodgy operators out there. Always be wary of promises of guaranteed returns or free money.
Research: Understand the project, the team behind it, and its potential use case.

Getting started usually involves signing up with a cryptocurrency exchange. You’ll likely need to verify your identity, and then you can start buying and selling. Remember that exchanges often charge fees, so factor that into your costs. If you’re keen to explore, you might want to check out some of the top cryptocurrencies for 2025.

Investing in cryptocurrency means you’re taking on a higher level of risk compared to more traditional assets. It’s wise to only invest money you can afford to lose and to spread your investments around, rather than putting all your eggs in one digital basket.

11. Gold

When things get a bit shaky in the financial world, a lot of people tend to look towards gold. It’s been around forever, and for good reason. Think of it as a bit of a safety net for your money. While shares might plummet or property values could take a nosedive, gold usually holds its own, or even goes up. This makes it a popular choice for people who want to protect what they already have, rather than just chase big profits.

Some investors like to spread their money around, and gold fits into that nicely. If all your other investments go south, your gold stash might still be worth something. It’s a way to make sure you don’t lose everything.

Here’s a quick rundown of how you might get into gold:

Physical Gold: You can buy gold bars or coins. You’ll need to think about where you’ll keep it safe and how to prove it’s real.
Gold Savings Plans: Some places let you invest a smaller amount regularly, like $50 a month. It’s a bit like a savings account, but for gold.
Gold ETFs: These are like baskets of gold investments that you can buy and sell on the stock market.

It’s worth remembering that gold doesn’t pay you anything while you own it, unlike shares that might give you dividends. You only make money when you sell it. Plus, there are costs involved with buying, storing, and insuring physical gold. Still, for many, the peace of mind it offers is worth it, and its role in investment portfolios could grow significantly in the long term.

Gold is often seen as a store of value, especially during uncertain economic times. It doesn’t produce income, but its price can fluctuate based on global demand, inflation fears, and geopolitical events. For some, owning a tangible asset like gold provides a sense of security that other investments can’t match.

12. Commodities

Investing in commodities means putting your money into raw materials or basic goods. Think things like oil, gold, wheat, or even metals like copper. These are the building blocks for a lot of what we use every day.

The value of commodities can swing quite a bit, often based on global supply and demand, weather patterns, and even political events. For example, a drought in Brazil could send coffee prices soaring, or a conflict in the Middle East might make oil more expensive.

Here are a few ways Aussies might get involved:

Directly buying physical commodities: This could be gold bars or silver coins. You own the actual item, but you’ve got to think about storage and insurance, which adds extra costs. Plus, you don’t earn any income from it; you only make money if the price goes up when you sell.
Commodity ETFs or Managed Funds: These are like baskets that hold various commodities or shares in companies that produce them. It’s a simpler way to get exposure without the hassle of storing physical goods.
Futures Contracts: This is a more advanced way to invest, where you agree to buy or sell a commodity at a set price on a future date. It’s pretty risky and usually for experienced traders.

Commodities can be a bit of a wild card in an investment portfolio. They don’t always move in the same direction as shares or bonds, which can sometimes be a good thing for balancing out your overall risk. However, their prices can be pretty volatile, so it’s not for the faint-hearted.

It’s worth noting that some ETFs might also include commodities as part of a broader investment strategy, alongside shares and other assets. If you’re thinking about commodities, it’s a good idea to do your homework on what drives their prices and how they might fit with your other investments.

13. Derivatives

Right, let’s talk about derivatives. These are a bit like the advanced level of investing, not really for your average punter just trying to grow their savings. Basically, a derivative is a contract between two parties. The value of that contract is tied to how some other asset performs – think stocks, currencies, commodities, or even interest rates. People often use derivatives to try and make a quick buck based on short-term market movements, but they come with a heap of risk.

Think of it this way: you’re not actually buying the underlying asset itself, but rather a contract that’s derived from its value. This can be exciting because you can potentially make money whether the asset’s price goes up or down, depending on the type of contract you’ve got. But that also means you can lose money just as quickly, sometimes even more than you initially put in.

Here’s a simplified look at some common types:

Options: These give you the right, but not the obligation, to buy or sell an asset at a specific price before a certain date. You pay a premium for this right.
Futures: These are agreements to buy or sell an asset at a predetermined price on a future date. They’re often used by businesses to lock in prices for things like commodities.
Contracts for Difference (CFDs): These allow you to speculate on the price movement of an asset without actually owning it. You’re essentially betting on the difference between the price when you open and close the contract.

While they sound complicated, and honestly, they are, derivatives can also be used by more experienced investors for hedging. That means using them to protect existing investments against potential losses. For example, if you’re worried about a drop in the price of something you own, you might use a derivative to offset that risk. It’s a bit like taking out insurance on your investments, but it comes with its own set of costs and complexities.

Derivatives are complex financial instruments. Their value is linked to an underlying asset, and they can be used for speculation or hedging. Due to their intricate nature and the potential for significant losses, they are generally considered high-risk and are best suited for experienced investors who fully understand the risks involved.

Wrapping It Up

So, there you have it. Investing your hard-earned cash in Australia for 2025 doesn’t have to be some big mystery. We’ve looked at a bunch of different ways you can make your money work for you, from the super safe stuff like term deposits to the more adventurous options like shares and even crypto. Remember, the best approach is usually a mix that fits what you’re trying to achieve and how much risk you’re comfortable with. Don’t just jump into anything; do a bit of homework, figure out your goals, and maybe chat to someone who knows their stuff. Getting started, even with a small amount, is the main thing. Your future self will probably thank you for it.

Frequently Asked Questions

What’s the best way to start investing if I don’t have much money?

Even a small amount can get you started! You could look into Exchange-Traded Funds (ETFs) which let you buy a bit of many different things at once, or consider regular small contributions to managed funds. Some platforms even let you buy fractions of shares. The key is to start small and build up over time.

Is it risky to invest in shares?

Investing in shares can be a bit of a rollercoaster. The value can go up and down a lot, especially in the short term. However, over the long haul, the Australian share market has historically grown. It’s often recommended to invest for at least five years to help smooth out any bumps.

What’s the difference between an ETF and a managed fund?

Think of ETFs like a pre-packaged basket of investments that you can buy and sell easily on the stock market, often tracking a specific index. Managed funds are similar, but they’re usually not traded on the market, and you pay a professional manager to pick the investments for you. This expertise usually comes with a higher fee than with ETFs.

Should I invest in property?

Buying property can be a great way to make money through rent or by selling it for more than you paid. But, it’s a big commitment with lots of upfront costs like deposits and ongoing expenses. For younger Aussies, it can be tough to get started, but there are schemes to help, and sometimes investing in areas that are growing might be a smarter move than trying to buy in expensive cities.

Is cryptocurrency a good investment for Aussies?

Cryptocurrencies are super popular but also super risky. Their prices can jump up or down really fast, often because of what people are saying online. While some people have made a lot of money, others have lost heaps. It’s best to only invest what you can afford to lose and really understand what you’re buying into.

How do I know which investment is right for me?

It really depends on what you want to achieve! First, figure out your money goals – are you saving for a car in two years or retirement in forty? Then, think about how much risk you’re comfortable with. If you want to play it safe, term deposits or fixed interest might be better. If you’re okay with more ups and downs for potentially bigger rewards, shares or ETFs could be the way to go.