How to invest $5,000 in Australia

There are plenty of options for savvy investors.

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So you've got $5,000 saved up and you want to know what you should be doing with it. You've come to the right place.

First, when it comes to investing, it's important to understand that there's always a risk versus reward pay off. For example, keeping your money in a bank account offers security, but your return on investment is very low or zero. You're barely beating the rate of inflation!

Your other option is to invest outside of the bank, such as in shares, ETFs or superannuation.

Learning about various investment alternatives is important because of the different levels of risk involved, as well as commissions, fees and minimum deposits to think about. We share some of your main options below.

Compare investment and trading accounts

Data indicated here is updated regularly
Name Product Standard brokerage fee Inactivity fee Markets International
IG Share Trading
Finder Award
IG Share Trading
AUD 8
AUD 50 per quarter if you make fewer than three trades in that period
ASX shares, Global shares, Forex, CFDs, Margin trading
Yes
$0 brokerage for US and global shares plus get an active trader discount of $5 commission on Australian shares.
Enjoy some of the lowest brokerage fees on the market when trading Australian shares, international shares, forex and CFDs, plus get access to 24-hour customer support.
eToro Share Trading (US stocks)
USD 0
USD 10 per month if there’s been no login for 12 months
Forex, CFDs, US shares
Yes
Zero brokerage share trading on US stocks with trades as low as $50.
Note: This broker offers CFDs which are volatile investment products and most clients lose money trading CFDs with this provider.
Join the world’s biggest social trading network when you trade stocks, commodities and forex from the one account.
Superhero share trading
AUD 5
No
ASX shares
No
Pay zero brokerage on all Australian ETFs.
Trade ASX stocks with a flat $5 commission fee and a low minimum investment of just $100.
Bell Direct Share Trading
AUD 15
No
ASX shares, mFunds
No
Invest in Australian shares, options and managed funds from the one account with no inactivity fee.
Bell Direct offers a one-second placement guarantee on market-to-limit ASX orders or your trade is free, plus enjoy extensive free research reports from top financial experts.
CMC Markets Stockbroking
AUD 11
No
ASX shares, Global shares, Forex, CFDs, Margin trading, Options trading, mFunds
Yes
$0 brokerage on global shares including US, UK and Japan markets.
Trade up to 9,000 products, including shares, managed funds, forex, commodities and cryptocurrencies, plus access up to 15 major global and Australian stock exchanges.
ANZ Share Investing
AUD 19.95
No
ASX shares, Global shares, Options trading, mFunds, ETFs, Warrants
Yes
Earn 1 Qantas Point per AU$3 spent on brokerage fees on certain instruments.
Access Morningstar reports, company announcements and and live pricing via ANZ’s share investing platform. Available for desktop and mobile.
Westpac Online Investing Account
AUD 19.95
AUD 63.50 per year on the global markets account
ASX shares, Global shares, Options trading, US shares
Yes
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Important: Share trading can be financially risky and the value of your investment can go down as well as up. “Standard brokerage” fee is the cost to trade $1,000 or less of ASX-listed shares and ETFs without any qualifications or special eligibility. If ASX shares aren’t available, the fee shown is for US shares. Where both CHESS sponsored and custodian shares are offered, we display the cheapest option.

Data indicated here is updated regularly
Name Product Minimum Opening Deposit Minimum Spreads for Major Currencies Commission Minimum Trade Size Platforms
eToro Forex Trading
USD 1,000
1.0 pips
$0
US$200 (to CopyTrade)
eToro Trading Platform
Margin FX is a complex financial product and traders are at high-risk of losing all of or more than their initial investment.
Social trading, advanced charting tools, plus receive exclusive benefits through the eToro Club (membership is tiered based on the equity in your trading account).
Plus500 Forex Trading
AUD 100
0.7 - 3.0 pips
$0
0.01 lots
Plus500 Trading Platform
Trading CFDs and forex on leverage is high-risk and losses could exceed your deposits.
Finder exclusive offer: Open a new trading account and receive a welcome bonus of AU$110 when you deposit your first $370 and enter the bonus code “Special200”. T&C’s apply.
Open an account and experience Plus500's easy-to-use proprietary trading platform, 24/7 online chat support and free real-time forex quotes.
IG Forex Trading
AUD 0
0.6 - 1.5 pips
$0
1 lot
MetaTrader 4
ProReal Time
IG Trading Platform
Trading CFDs and forex on leverage is high-risk and losses could exceed your deposits.
Introductory offer: For the first two weeks of trading, take advantage of IG's lower minimum trade sizes to help you build confidence.
Choice of trading platforms. Choose optional extras like advanced charting, reporting and order types. Over 90 currency pairs to choose from.
IC Markets Forex Trading (Raw Spread account)
USD 200
From 0.0-0.1 pips
AU$3.50 per 100k traded
0.01 lots
MetaTrader 4
MetaTrader 5
cTrader
Trading CFDs and forex on leverage is high-risk and losses could exceed your deposits.
Citi Foreign Exchange Services
AUD $0
0.5 to 1.5
$0
US$20,000
Desktop / Relationship Manager
Invest directly in hundreds of global currencies with help from experienced forex brokers.
Note: Citi is not a CFD provider.
City Index Forex Trading
AUD 0
0.5 - 1.22 pips
$0
0.01 lots
MetaTrader 4
At Pro
Advantage Web
Trading CFDs and forex on leverage is high-risk and not suitable for all investors and you could lose your initial investment. Always check the provider’s PDS and consider the risks before trading.
Choice of trading platforms, integrated Reuters news and device-synching so you can monitor trades across multiple devices.
Blueberry Markets Forex Trading
$100
From 0.0 pips
$0
0.01
MetaTrader4, MetaTrader5
Trading CFDs and forex on leverage is high-risk and losses could exceed your deposits.
Bottom of the market fees on forex, CFDs and commodities with 24/7 quality customer service.
CMC Markets
$0
0.7 - 1.5 pips
$0
0.01 lots
CFD Next Generation
MetaTrader 4
Trading CFDs and forex on leverage is high-risk and losses could exceed your deposits.
Pepperstone Forex Trading (Razor Account)
USD 200
0.0 - 0.1 pips
AU$3.50 per 100k traded
0.01 lots
MetaTrader 4
MetaTrader 5
cTrader
Margin FX is a complex financial product and traders are at high-risk of losing all of or more than their initial investment.
Choose from a range of fee-free funding methods, plus a suite of 10 different apps available as part of Pepperstone's Smarter Trading Tools.
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Trading CFDs and forex on leverage is high-risk and you could lose more than your initial investment. It may not be suitable for every investor. Refer to the provider’s PDS and consider the risks before trading.

Name Product Past Performance - 1 Year Past Performance - 3 Years Performance - 5 Years Calculated fees p.a. on $50,000 balance
AustralianSuper - Pre-mixed, Balanced option
0.56%
6.67%
7.37%
$411.18
AustralianSuper is an award-winning industry super fund and the largest super fund in Australia. The Balanced fund invests in a mix of different assets like shares, property and cash.
Virgin Money Super - Lifestage Tracker
-0.86%
6.46%
$358
Virgin Money Super's Lifestage Tracker invests in a range of different assets in line with your age, reducing your risk as you get older, and has some of the lowest fees in the market.
Australian Ethical Super Balanced
2.77%
6.88%
6.88%
$622
Certified by the Responsible Investment Association Australasia.
Australian Ethical seeks to invest in companies that have a positive impact on the planet, people and animals, such as renewable energy and healthcare while avoiding investments in coal, oil, tobacco and gambling.
Sunsuper Lifecycle Balanced
-1.69%
5.7%
6.45%
$453
Sunsuper is an award-winning super fund with more than 1.4 million members. Its Lifecycle Balanced option invests your super in a mix of growth assets, and reduces your risk when you're near retirement.
QSuper Lifetime - Aspire 1
-0.35%
5.97%
6.91%
$315
QSuper is one of the largest member-owned funds in Australia. The QSuper Lifetime fund adjusts your investments each 7-10 years as you get older, so you're not taking on too much risk.
Spaceship GrowthX
11.93%
14.45%
$536
This is a high-risk investment option that aims to deliver high returns over the long term.
Spaceship's Growth X fund invests heavily in Australian and international shares, with a focus on technology stocks. Performance figures and fees supplied by Spaceship, not Chant West.
Australian Catholic Super Lifetime - Grow
-0.39%
N/A
$588
A Catholic super fund open to all Australians and designed for people working in Catholic education, healthcare or aged care.The Lifetime One fund option changes your investment mix as you get older.
Aware MySuper Life Cycle Growth
1.33%
6.34%
6.56%
$549.42
Aware Super is a not-for-profit fund with more than 750,000 members. The MySuper product invests your super in a pre-mixed Growth fund until you’re 60, then it’ll switch to Balanced.
LUCRF MySuper Balanced
-0.91%
4.7%
5.2%
$497
LUCRF Super is an industry super fund open to all Australians with 11 different investment options available. Its default MySuper Balanced option is a simple, diversified portfolio designed to suit most members.
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The information in the table is based on data provided by Chant West Pty Ltd (AFSL 255320) which is itself supplied by third parties. While such information is believed to be accurate, Chant West does not accept responsibility for any inaccuracy in such information. Chant West’s Financial Services Guide is available at https://www.chantwest.com.au/financial-services-guide . Finder offers no guarantees or warranties about the data and we recommend that users make their own enquiries before relying on this information. Performance, fees and insurance data is based on each fund's default MySuper product. Where the performance, fees and insurance data for the MySuper fund vary according to the member's age, results for individuals between 40-49 years of age have been shown. Past performance is not a reliable indicator of future performance.

*Past performance data is for the period ending June 2020.

Disclaimer: Performance, fees and insurance data is based on each fund's default MySuper product. Where the performance, fees and insurance data for the MySuper fund vary according to the member's age, results for individuals between 40-49 years of age have been shown. This article is general advice. You should consider your own personal circumstances before deciding if a superannuation product is right for you. Superannuation is a long term investment and past performance is not indicative of future performance.

Data indicated here is updated regularly
$
$
months
Name Product Maximum Variable Rate p.a. Standard Variable Rate p.a. Bonus Interest p.a. Fees Interest Earned
Westpac Life (18-29 year olds only)
3%
0.2%
2.8%
$0
If you’re between 18-29, you can earn a 3% p.a. variable rate each month you grow your balance (excl. interest) and make 5+ settled debit card purchases from your linked Westpac Choice account, up to a balance of $30,000.
Westpac Life (18-29 year olds only)
0.55%
0.2%
0.35%
$0
If you’re between 18-29, you can earn a 0.55% p.a. variable rate each month you grow your balance (excl. interest) and make 5+ settled debit card purchases from your linked Westpac Choice account, up to a balance of $30,000.
MyState Bank Bonus Saver Account
1.2%
0.1%
1.1%
$0
Ongoing, variable 1.2% p.a. when you deposit at least $20 into the account each month and make 5 or more Visa Debit card transactions from a linked MyState transaction account. Bonus interest available on balances up to $250,000.
Citibank Online Saver
0.35%
0.35%
0%
$0
Introductory rate of 0.35% p.a. for months, reverting to a rate of 0.35% p.a. Available on balances Up to $500,000.
Citibank Online Saver
1.1%
0.35%
0.75%
$0
Introductory rate of 1.1% p.a. for 4 months, reverting to a rate of 0.35% p.a. Available on balances Up to $500,000.
Bankwest Hero Saver
0.8%
0.01%
0.79%
$0
Ongoing, variable 0.8% p.a. rate when you deposit at least $200 each month and make no withdrawals. Available on balances up to $250,000.
Bankwest Hero Saver
0.01%
0.01%
0%
$0
Ongoing, variable 0.01% p.a. rate when you deposit at least $0 each month and make no withdrawals. Available on balances up to $250,000.
HSBC Flexi Saver Account
0.85%
0.05%
0.8%
$0
Ongoing, variable 0.85% p.a. when you grow your balance by $300+ per month. Earn bonus interest even if you make withdrawals during the month. Available on balances up to $5,000,000.
HSBC Flexi Saver Account
0%
0%
$0
Ongoing, variable 0% p.a. when you grow your balance by $300+ per month. Earn bonus interest even if you make withdrawals during the month. Available on balances up to $5,000,000,000.
Westpac Life
0.55%
0.2%
0.35%
$0
Ongoing, variable 0.55% p.a. each month you deposit money, and make sure your balance is higher at the end of the month than it was at the beginning. No monthly account-keeping fee.
HSBC Serious Saver
0.9%
0.05%
0.85%
$0
Receive a maximum variable rate of 0.9% p.a. for 4 months, reverting to an ongoing rate of 0.05% p.a. for each month you don't make any withdrawals from the account. Available on balances below $1,000,000.
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Data indicated here is updated regularly
Name Product 3 Mths p.a. 4 Mths p.a. 5 Mths p.a. 6 Mths p.a. 7 Mths p.a. 12 Mths p.a. 24 Mths p.a.
Judo Bank Term Deposit
0.81%
-
-
0.82%
-
0.89%
1.30%
Earn a 0.10% p.a. loyalty bonus when you roll over your term.
The Judo Bank Term Deposit term lengths range from three months to five years. Minimum opening deposit is $1,000. No account-keeping or set-up fees to pay.
AMP Term Deposit $5000+
0.40%
0.40%
0.40%
0.50%
0.50%
0.55%
0.40%
Lock your money with AMP Bank Term Deposit Account and enjoy a great competitive rate with no fees.
Citibank Term Deposit $10,000
0.60%
-
-
0.60%
-
0.60%
-
Suited to customers with deposits between $10,000 and $249,999.
This term deposit is for new Citibank customers only
AMP Term Deposit $25,000+
0.60%
0.60%
0.60%
0.70%
0.70%
0.75%
0.60%
Lock your money with AMP Bank Term Deposit Account and enjoy a great competitive rate with no fees.
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What are my options if I want to invest $5,000?

Pay outstanding debt

First things first – if you have any debt, it's important to pay it off before you think about investing. This is because the interest you're charged on debt is very likely to be higher than the returns you can achieve through investing.

Contribute to your superannuation

Contributing to your superannuation fund can be a great idea, provided you're happy to have the money locked away for a long time. The best reason to top up your super is because you can avoid paying your usual income tax.

Any contributions you make to your super straight out of your salary is only subject to 15% tax. If you make contributions from post-tax income and earn less than $50,564 per annum the government matches your donations and this money adds to your super as well.

Compare super fund accounts

Managed funds + ETFs

Investment funds allows you to invest in a portfolio of stocks and other assets such as gold or property. Instead of building an investment portfolio yourself, you benefit from the expertise of fund managers.

Not all investment funds are successful, so before you invest, it's important to do your research and understand what kinds of fees you'll be charged and how the fund has performed historically. Most managed funds have a minimum investment of $10,000+, whereas ETFs have a $500 minimum investment – so for a $5,000 deposit, an ETF might be your better choice.

Shares

Although riskier, the stock market historically offers better returns than bank accounts. By buying shares, you’re essentially owning a small portion of the company. If the company generates profits, you stand to earn dividends, and you can also benefit by an increase in share prices.

The minimum initial investment in Australian shares is $500, so you can invest in one or multiple companies with your $5,000. Meanwhile, US stocks have no minimum investment requirement, so you can start investing as little as a few dollars into stocks if you choose, depending on your stock broker.

Compare share trading accounts

Robo advisors

Robo advisors are platforms or apps that automate your investments. Typically they provide a list of stock or ETF portfolios for you to choose from, and you can deposit a few dollars at a time or thousands of dollars if you prefer. Head to our robo advice homepage for a list of robo advisors in Australia.

P2P platforms

Peer to peer (P2P) platforms allow you to lend your money to everyday borrowers in exchange for a fee. The lender is typically offered an interest rate on the amount they've deposited which varies depending on risk level and the P2P platform itself.

Minimum deposits range from as little as $10 up to $10,000, and the return that you can expect is normally a fixed rate. Head to our P2P homepage to find out more and compare your options.

Term deposits and high-interest savings accounts

Anyone looking for guaranteed returns can consider setting money aside in a term deposit or a high interest savings account. While a term deposit requires that you put your money away for a chosen time period, high interest savings accounts offer easier access to funds.

Compare Term deposit and HISA accounts

How else can I profit from $5,000?

Other high-risk options are not so much 'investments' as trading. This is because when you trade in markets such as forex, CFDs or futures, there's a very high possibility that you'll lose your money. In the case of CFDs and forex, most customers lose their money – so in some ways, trading can be more like gambling.

As always in investing, the higher the risk, the greater your potential to make a big return. If you're willing to take on the risk, below are some of the options you can choose:

Options

Options are contracts that let you buy or sell underlying assets at specified prices on specified dates, without actually having ownership. The time period they remain valid for can vary from a few weeks to a few months. Investing in options requires that you learn the tricks-of-the-trade well, failing which you can lose money.

Futures

You can benefit by investing in futures through considerable leverage. With $5,000, you can control a futures contract worth around $75,000, but needing access to additional cash if there’s a margin call can be a problem. Besides, the end result can be you losing more money than you’d started off with. There are limited

Trading foreign exchange

You can benefit through leverage by trading currencies in the forex market, but you can also suffer significant losses. Similar to the futures market, leverage allows traders to make a significant amount of money from small initial investments in exchange for the risk of losing it all. Head to our guide on forex trading to find out how it works.

Compare forex trading accounts

How do I compare investment products?

  • Minimum amount requirements. If you want to open a term deposit the starting point is usually $500 or $1,000. In the share market, you must initially invest at least $500 in Australian companies and you can start from as little as a few dollars when you buy US stocks.
  • Fees and commissions. Fees vary across different products. If you’re planning to invest in shares or ETFs, expect to pay some kind of brokerage fee. High interest savings accounts and term deposits tend not to charge any account keeping fees.
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What are the pros and cons to using a savings account?

Putting your money into a savings account wont get you the high returns you might want, but it's a good choice if you need to access the funds within the next 12 months or so. Here are some of the main pros and cons.

Pros

  • Government guarantee. The Australian Government Guarantee Scheme provides security to deposits of up to $250,000 per person per institution, and you can fall back upon this scheme in case your financial institution has trouble in honouring your deposit. To make the most of this scheme, you can consider banking with multiple institutions when cumulative balances in any one institution crosses the $250,000 mark.
  • Guaranteed returns. Putting your money in a savings account is a safe bet because you’ll continue to earn a standard variable rate for as long as you keep money in the account. Online banks tend to offer better rates than conventional banks because they benefit through reduced overhead costs. Credit unions also offer competitive interest rates because they don’t have to share profits with shareholders. If you choose the right account and play your cards right you can even earn bonus interest.
  • Cater to different needs. Features that savings accounts come with can vary from one offering to the next, allowing you to choose an account as per your needs. If you want 24/7 access to money in your account, pick one that provides free access to online and phone banking. If you want to use money in your account to pay bills, you can find an account that provides BPAY access.

Cons

  • Inadequate returns. Savings accounts in Australia tend to offer interest rates in between 0.5% and 2.5%. These rates are lower than what you stand to make through other means of investments.
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What are the risks of investing?

  • Limited information. A little research can go a long way in the world of investments even if you’re putting your money is a seemingly simple asset like a term deposit. This is because not all financial institutions offer the same interest rate. When dealing with more complicated assets like shares and futures, learning the intricacies becomes all the more important.
  • Fees. When you invest your money, you’ll use the services of a financial institution or a broker, or both. Before you begin any such relationship, take time you find out how much you may have to pay as fees in different situations.
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Is there anything else I should consider?

  • Risk. In most cases, there is a direct link between the risk your investments face and the returns they generate. If you’re looking at greater potential returns, it is only natural that you should prepare to take higher levels of risk. However, risk perception can vary and does not have a necessary bearing on statistical analysis.
  • Risk profiling. Your willingness to take risk coupled with how it can affect your judgement translates into your risk profile. By going through the process of risk profiling you address aspects like risk capacity, risk required and risk tolerance, and this helps you arrive at optimal investment risks.
  • Financial goals. Setting financial goals is crucial but you should be able to measure how you’re doing as and when required. When planning for retirement, calculate just how money you’ll require when time comes.

Frequently asked questions

Disclaimer: This information should not be interpreted as an endorsement of futures, stocks, ETFs, CFDs, options or any specific provider, service or offering. It should not be relied upon as investment advice or construed as providing recommendations of any kind. Futures, stocks, ETFs and options trading involves substantial risk of loss and therefore are not appropriate for all investors. Trading CFDs and forex on leverage comes with a higher risk of losing money rapidly. Past performance is not an indication of future results. Consider your own circumstances, and obtain your own advice, before making any trades.

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