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. Superannuation
Right, let’s talk about super. If you’re working in Australia, your employer is legally required to pay a certain percentage of your wages into a super fund for you. This is called the Superannuation Guarantee, and it’s basically free money from your boss that’s earmarked for your retirement. It’s not just sitting there, either; most super funds invest this money to help it grow over time.
Think of it as a long-term savings plan that’s mostly on autopilot. The government’s been gradually increasing the minimum contribution rate, and it’s set to hit 12% by July 2027. So, even if you don’t do anything extra, your super balance should be ticking up.
But here’s the thing: the default contributions might not be enough for the kind of retirement you’re dreaming of. You can actually choose how your super is invested, picking from different risk levels and types of assets. If you’re feeling a bit more adventurous and want to give your retirement nest egg a boost, you could consider making extra contributions. This could be through salary sacrificing, where you arrange with your employer to put more of your pre-tax salary into your super. Not only does this grow your retirement savings faster, but it can also lower your taxable income for the year, which is a nice little bonus.
It’s worth remembering that super funds charge fees, and these can eat into your returns over time. Since November 2021, a ‘stapled super fund’ system means your fund generally follows you from job to job, which helps avoid having multiple accounts with multiple fees. Consolidating your super into one fund is often a smart move to keep those costs down and let more of your money grow.
Here are a few things to keep in mind:
- Contribution Caps: There are limits on how much you can contribute each year before extra taxes apply. It’s a good idea to check these out, especially if you’re thinking about making large extra payments.
- Investment Options: Most funds offer a range of investment options, from conservative to high growth. Choose one that matches your comfort level with risk and how long you have until retirement.
- Fees: Always check the fees your super fund charges. Even a small difference in fees can add up to a significant amount over decades.
- Consolidation: If you’ve had a few jobs, you might have more than one super account. Look into consolidating them into a single fund to reduce fees and simplify things.
2. Australian Shares & Dividends
Buying shares in Australian companies is a pretty common way people try to grow their money. When you buy a share, you’re essentially buying a tiny piece of that company. If the company does well, its profits might go up, and hopefully, the price of your share goes up too. That’s the main idea – hoping for growth.
Lots of these companies also share a portion of their profits with shareholders. These payments are called dividends. For some people, especially those who are retired or have a Self-Managed Super Fund (SMSF), dividends can be a nice, regular bit of income. Plus, thanks to something called ‘franking credits’, the tax you pay on these dividends can often be lower, making them quite tax-efficient.
Here’s a quick look at what you get with Australian shares:
- Growth Potential: Companies can expand, innovate, and become more valuable over time, which can lead to an increase in your share price.
- Dividend Income: Many established Australian companies pay out a portion of their profits as dividends, providing a potential income stream.
- Ownership: You become a part-owner of the company, with voting rights on certain company matters.
However, it’s not all sunshine and rainbows. Share prices can swing around quite a bit. Things like company news, economic shifts, or even just general market mood can cause prices to drop. It’s really important to remember that share market investments carry risk, and you could lose money. Most experts suggest investing for the long haul, like five years or more, to help ride out the ups and downs.
Before you jump in, it’s a good idea to do some digging. Understand the company you’re thinking of investing in, what industry it’s in, and how it’s been performing. Spreading your money across different companies and sectors can also help reduce your overall risk. It’s not about picking just one winner, but building a solid mix.
For example, ASX-listed companies have historically offered dividend yields in the range of 4-6%, which can be quite attractive when combined with franking credits.
3. ETFs For Diversification
Exchange-Traded Funds, or ETFs, have become super popular, and it’s easy to see why. Basically, they’re a way to get a whole bunch of different investments in one go, without having to pick each one yourself. Think of them as a bit of a hybrid between shares and managed funds.
An ETF pools money from heaps of investors and then uses that cash to buy a basket of assets. These assets could be shares in different companies, bonds, commodities, or even a mix of everything. A lot of ETFs here in Australia are set up to follow a specific market index, like the ASX 200, so their performance usually just mirrors that index. This makes diversification really straightforward.
Here’s a quick look at why they’re a good option for many:
- Spreading the Risk: Instead of putting all your eggs in one basket with just a couple of companies, an ETF gives you exposure to dozens, sometimes 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. This is 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.
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 simple 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.
4. Property
Property is a classic investment in Australia, and for good reason. It can offer both rental income and the chance for your capital to grow over time. However, it’s not a simple ‘set and forget’ option like some others.
Buying a physical property, like a house or an apartment, to rent out is what most people think of. You’ll need a significant deposit, and then there are the ongoing costs – mortgage repayments, council rates, water bills, and keeping the place in good repair. Plus, you’ve got to find tenants, deal with any issues they have, and make sure the rent is paid on time. It can be a lot of work, and sometimes, finding good tenants can be a real challenge.
But the upside is pretty clear. Property values have historically trended upwards, and you get that regular cash flow from rent. It’s a tangible asset, which many people find reassuring. According to Domain’s Price Forecast Report for FY25-26, we’re looking at continued property price growth in Australia over the next 12 months, which is good news for investors.
If the idea of being a landlord sounds a bit much, there are other ways to get involved:
- Real Estate Investment Trusts (REITs): These are companies that own and manage income-producing properties. You buy shares in the REIT, and they handle all the property management. It’s a way to get exposure to property without the direct hassle. REITs often pay out a good chunk of their income as dividends, so they can be a source of regular income.
- Fractional Ownership Platforms: These allow you to buy small stakes in a property. It means you don’t need a huge deposit, but you’ll only receive a portion of the rental income and any profit if the property is sold.
Property investment requires careful consideration of your financial situation, the local market conditions, and your tolerance for risk. It’s a long-term game, and unexpected costs or vacancies can impact your returns.
When considering property, think about:
- Location: Is it a desirable area for renters or future buyers?
- Market Trends: What’s happening with property prices and rental demand in that specific area?
- Your Financial Capacity: Can you comfortably afford the deposit, mortgage, and ongoing expenses, even if the property is vacant for a period?
It’s a big commitment, but for many Australians, it’s a cornerstone of building wealth.
5. Investment Bonds
Investment bonds are often called the ‘quiet achiever’ in the investment world, and for good reason. They’re a bit different from shares or property, offering a way to invest your money that’s taxed internally. This can be a real plus for folks on higher incomes.
The big drawcard for investment bonds is that after you’ve held them for 10 years, any money you withdraw is completely tax-free. Plus, they can be structured to pass directly to your beneficiaries when you’re gone, skipping the whole probate process. Pretty handy for estate planning, right?
Here’s a quick rundown of how they generally work:
- How they’re taxed: The investment bond itself is taxed at a flat rate of up to 30%. This is often lower than the top marginal tax rate for individuals, which is why they appeal to higher earners.
- Investment options: You usually get to choose how your money is invested within the bond. This could be anything from conservative options to more growth-focused ones, depending on your comfort level with risk.
- Withdrawal rules: While withdrawals are tax-free after 10 years, there can be tax implications if you withdraw before then. It’s worth checking the specifics for your situation.
Investment bonds aren’t for everyone, but if you’re looking for a tax-effective way to grow your wealth over the long term and want to simplify your estate, they’re definitely worth a closer look. They offer a steady, predictable way to invest without the day-to-day ups and downs you might see elsewhere.
6. 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.
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.
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.
7. Managed Funds
Managed funds, sometimes called mutual funds, have been around for ages, even before ETFs became a thing. The basic idea is you chuck your money in with a bunch of other investors, and a professional fund manager takes that big pile of cash and invests it in a mix of stuff. Think shares, bonds, maybe even some property – whatever they reckon will do well.
The main point 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.
There are a couple of main types to think about:
- Actively Managed 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.
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.
Managed funds are often a good way to get a wide range of investments in one go, which can help lower your overall risk. While they 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.
8. Gold
When the economy feels a bit wobbly, a lot of folks turn to gold. It’s been a go-to for ages, and for good reason. Think of it as a bit of a safety net for your money. While shares might tank or property values could take a serious dive, gold usually holds its own, or sometimes 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.
Gold can be a good way to spread your investments around. 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. This can involve costs for storage and insurance.
- 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, and you can often buy it through places like the Perth Mint or ABC Bullion.
- Gold ETFs: These are like baskets of gold investments that you can buy and sell on the stock market, similar to shares.
It’s important to remember 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.
9. Bonds
Bonds are basically an IOU. You lend money to an entity – like the government or a company – and they promise to pay you back with interest over a set time. It’s a bit like a loan, but you’re the one doing the lending. This makes them generally less risky than shares because the interest payments are usually fixed and you know what you’re getting.
Think of them as a more predictable way to earn a return. They’re a good option if you’re looking for something a bit more stable than the stock market, especially if you’re worried about big swings.
Here are a couple of common types you might see in Australia:
- Government Bonds: These are issued by the Australian government or state governments. They’re usually considered pretty safe because governments are pretty good at paying their debts back.
- Corporate Bonds: These come from companies. The safety here really depends on how financially sound the company is. A big, stable company will usually offer lower interest rates than a company that’s a bit more of a risk.
While bonds are generally seen as safer, they aren’t completely risk-free. Things like changes in interest rates or inflation can still affect their value, especially if you need to sell them before they mature. It’s always good to know what you’re getting into.
When you’re looking at bonds, you’ll often see terms like ‘yield’. This is basically the return you can expect on your investment, usually expressed as a percentage. It’s important to compare yields to see which bond might give you a better return for the level of risk you’re comfortable with.
10. Cryptocurrency
Cryptocurrencies are definitely a hot topic, and for good reason. You hear stories about people making a killing, but also about those who lost a fair bit. It’s a pretty wild space, and the prices can jump around a lot based on news or what’s trending online. If you’re thinking about getting into crypto, it’s really important to do your own research. Don’t just buy something because a mate told you about it. Try to get your head around the technology and what it’s actually meant to do. If it doesn’t make sense, it’s probably best to give it a miss.
Here are a few things to keep in mind:
- Volatility: Prices can change dramatically, really quickly. You need to be ready for that.
- Regulation: The rules for crypto are still being figured out, which adds a bit of uncertainty.
- Scams: Sadly, there are plenty of dodgy people out there. Always be suspicious of promises of guaranteed returns or free money.
- Research: Understand the project, who’s behind it, and what it could be used for.
Getting started usually means signing up with a cryptocurrency exchange. You’ll probably need to prove who you are, and then you can start buying and selling. Just 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.
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. You don’t need to buy whole coins either; you can often buy fractions, so you don’t need a huge amount of cash to start.
Wrapping Up Your Investment Journey
So, that’s a look at some of the ways you can put your money to work here in Australia for 2025. We’ve covered everything from the pretty safe bets like term deposits to the more exciting options like shares and even a quick mention of crypto. The main thing to remember is that there’s no one-size-fits-all answer. The best plan for you will probably be a mix of different things that line up with what you want to achieve and how much risk you’re okay with. Don’t feel like you need to rush into anything. Take some time to do a bit of research, get clear on your goals, and maybe even have a chat with someone who knows their stuff. Starting small is totally fine, and honestly, it’s the most important step. Your future self will likely be pretty chuffed you did.
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.
