With coronavirus concerns hitting share markets, many Aussies might be wondering where is a safe place for their money. If you've been working hard and saving cash, the recent share price crash might be worrying. The S&P/ASX 200 Index (ASX: XJO) is down 22% in 2020 (at the time of writing) and many growth and dividend shares have been hit hard.
But the good news is that there are options right now. Let's look at a few places where your money will be safe right now.
Is my money safe in the bank?
The simple answer to this is yes. Your deposits in an authorised deposit-taking institution (ADI) is guaranteed by the Federal Government (up to $250,000). That means your money will be safe, even if you think the banks would have any trouble.
However, while your money might be safe, it is unlikely to get a good return. The official interest rate is sitting at 0.25% right now and looks to be staying there for a while. That means the interest on your bank account might well be less than 2%, which is less than the average inflation rate.
Where can I find higher yield investments?
Unfortunately, to find more return, you have to take on more risk. That means your money might be less safe than a government-guaranteed bank deposit or a term deposit. But it's not all bad news for investors with some cash right now.
ASX shares have been smashed in March and are trading at some cheap prices. There are certainly some more risky buys at the moment, such as ASX travel shares, because no one knows what's likely to happen in those hardest-hit industries.
But there are still some high-quality ASX shares that could be a bargain. I like Fortescue Metals Group Limited (ASX: FMG) shares right now, which are currently yielding 9.17%. If we see demand from China pick up in the next few months, Fortescue could be well-placed to pay its dividend and maintain its value.
While ASX shares may not be a safe place for your money in the short-term, a diversified portfolio should perform well over time.
Foolish takeaway
It's a very personal decision on where to put your hard-earned cash. Especially when times are tough, it can be tempting to look for a safe place for your money. But if you hide your money under the mattress, you might miss out on a once in a lifetime buying opportunity for ASX investors right now.
