After several banks trimmed posted rates on fixed-term deposits, "where should the money go" became the most common question. We put it to five advisers with more than ten years in the job each.

The first point of agreement came quickly: keep enough available. All five suggested holding three to six months of household spending in an account that can be drawn at any time, and leaving that portion out of any comparison of returns.

The disagreement starts with longer-term money

For the remainder, the advice diverged. Some argued for extending duration to lock in current rates; others for staying flexible and waiting for a better entry point; others still for filling gaps in insurance cover before discussing returns at all.

When a client asks what to buy, I ask when they need the money. If they cannot answer that, the rest of the conversation is wasted.— One of the advisers interviewed
The advisory desk at a bank branch.
The advisory desk at a bank branch.
  • Agreed: hold three to six months of spending in cash
  • Agreed: cover protection needs before chasing returns
  • Disputed: whether to lock in duration on longer-term money
  • Shared warning: be wary of products promising high returns and capital protection

Their closing advice was identical: be wary of anything that promises high returns and capital protection in the same breath. In a falling rate environment, such claims tend to become more common.

This article summarises the views of those interviewed and is not investment advice. Readers should consider their own circumstances.