3 Simple Ways To Invest Your Idle Cash To Receive High Returns


The following are 3 Simple Ways To Invest Your Idle Cash To Receive High Returns:

  • Ordinary Shares
  • Market money Funds
  • Government Bonds

Sometimes you may have some idle cash that you are not ready to use anytime soon.

Why must you keep such idle cash in a strong room in your house?

Does it even make any economic sense to keep your idle cash in a bank savings account?

How much interest will the bank pay you on your savings account?

Why not invest your idle cash in profitable securities that will yield you high returns?

The best part is that there are multiplicity of securities you can choose from.

Beyond that, you can invest your idle cash within the country or outside the country.

For a start, the following are just 3 simplest ways you can invest your idle cash.


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Invest your idle cash in Ordinary Shares

You can invest your idle cash in ordinary shares of profitable companies.

Before you invest in ordinary shares, you should ensure that the company’s stocks are quoted and traded on the Stock Exchange.

The  following are the benefits of investing your idle cash in ordinary shares:

  • You have the right to vote during the company’s annual general meetings
  • You can also be voted for during annual General meetings.
  • Dividends will be paid to you two times in a year, if the company declares dividends.
  • The  company can issue you bonus (free) shares if it has a reasonable balance  in its Share Premium Account
  • You automatically qualify for Right’s issue of shares.
  • Right’s offer of shares are reserved for existing shareholders.
  • If you are not interested, you can sell the shares reserved for you.
  • If the price of shares appreciates, you will benefit from Capital gains.
  • You can reinvest your dividends or fill an e-dividend form that will enable the registrars to pay your dividends into your bank account.
  • It is easy to buy or sell shares
  • In the event of liquidation, you will not be required to pay more money to pay off the company’s debts.
  • Should the company shut down, you will not lose more than the money you invested.
  • You can have a voice in the internal running of the company, especially if you are a majority shareholder

How To Invest in ordinary shares

If you want to invest your idle cash in ordinary shares of any company, you need to:

  • Look out for companies that pay dividends regularly
  • Get Lawyer, preferably an accountant to help you check out the company’s share prices and dividends history.
  • Look for an experienced, reliable and  registered stock broker
  • Open shares brokerage account with your chosen stockbroker.
  • Give the stock broker instructions to buy shares that you have chosen
  • Or ask the stockbroker to recommend shares for you.

For best results, you should allow your investment in ordinary shares to remain invested for, say, 5 years and above.

Bonus: If you want to invest in ordinary shares, my first choice for you is. Zenith Bank Plc. The second choice is Guaranty Trust Bank Plc. Both banks have track records of consistent dividend payments. Others are Access Bank, FBH Holdings, and UBA Plc.

How to sell ordinary shares

When you want to sell your ordinary shares, you can just give your stock broker instructions to sell your shares for you.

You can sell all or a portion of your share holdings.

The prices of ordinary shares move up and down on daily basis.

Nevertheless, a stock broker knows the best time to sell your shares for you.

The good news about investing in ordinary shares is that you can get the proceeds from the sale of your shares in just a matter of days.

Invest your idle cash: Money Market Funds

This is another easy and less risky way you can invest your idle cash.

The following are the main advantages of investing in money market funds:

  • The process is easy
  • It is also easy to redeem your investment and get paid in less than 5 working days
  • You can start investing with as little as 5k
  • You can top up your investment, daily, weekly, monthly as you like

How to invest in money market funds

If you want to invest your idle cash in money market funds, the procedure is as follows:

  • Go to any authorized Money Market Funds Manager (mainly banks)
  • Ask for money market funds investment form
  • Fill out the required fields, stating your account details.
  • State how much money you want to invest.
  • The bank will open and give you an e-account number.
  • You will then pay the money to the bank cashier
  • And collect your teller

How to redeem investments in money market funds.

Should you desire to redeem the investment, the following are the procedures:

  • Ask for money market funds redemption form
  • Fill out the required fields

State your regular account number (it can be any other bank where you have an account)8

  • Fill in your e-accounts number
  • Submit your form

Your regular account will be credited with the proceeds of the redemption within 3-4 working days.

Personally, I use StanbicIBTC Bank, the award winning mutual funds managers.

Invest your idle cash in FGN Bonds

The third place you can invest your idle cash without any risk, is in Federal Government of Nigeria bonds.

In Nigeria the Debt Management Office is the body that sells bonds to the public, through duly licensed institutions.

At the beginning of every month, the Debt Management Office announces  offers of new bonds for subscription by the public.

When you buy government bonds, the debt management office will issue you a certificate acknowledging that you loaned the money to the government.

The best part is that the FGN bonds are traded on the floors of the Nigerian stock exchange.

What is FGN Bond?

In case you don’t know, bonds are loans given to the federal government to execute specific projects.

The interest on the bonds is fixed at the beginning of the tenor. The terms of issue cannot be reviewed during the tenor of the bonds.

The tenor is for a minimum of 2 years.

When the bond matures, the government will pay you both the principal and the interest.

If you invest in government bonds, you will enjoy the following benefits:

  • The loans is guaranteed by the Federal Government of Nigeria
  • It is the safest investment.
  • That means that the government will not default in paying you
  • Interest on bonds will be paid to you every six months
  • The minimum investment is N10,000 in the first instance
  • Thereafter, you can make subsequent investment in multiples of N1,000
  • At due dates. you will be issued with a warrant for interest payment
  • You can pay your interest to your bank account
  • If you so desire, you can sell your bonds during the tenor of the subscription
  • For more info, you can visit the Standbicibtc Stockbrokers Limited.

Beyond that, such periodic interest payments will enable you to meet some of your urgent needs.

Comparison of Bonds and Savings Account

Moreover, in any of the above investment options you will earn returns higher than what the bank will pay you as interest.

The banks are smart enough to loan your money to business owners at very high interest rates.

They later turn round to pay you peanuts as interest on your savings account.

In other words, the banks are using the money in your savings account to make high profits.

Therefore, you can see that it does not make any economic sense for you to leave your idle cash at home or in a bank savings account.

Finally, if you have not started investing before, there can be no better time than now to start investing your idle cash.

Invest your idle cash and watch your money grow while you are asleep. You will be glad you did.

Related:10 Greatest Benefits Of Investing In Ordinary Shares Of Profitable Companies


Samuel Ijenhi

B. Sc. Accounting (University of Benin)

Benin City, Nigeria.



About Samuel Ijenhi

A graduate in Accounting, University of Benin, Benin City, Edo State, Nigeria.
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