Get the Finder app 🥳

Connect your accounts & save

How to invest $5,000 in Australia

There are plenty of options for savvy investors.

Updated . What changed?

Fact checked

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 Standard brokerage for US shares Inactivity fee Currency conversion fee Markets
IG Share Trading
AUD 8 or
0.1%
USD 0
AUD 50 per quarter if you make fewer than three trades in that period
0.70%
ASX shares
Global shares
Forex
CFDs
Margin trading
Active trader brokerage discount: or if you've placed trades or more in the prior month.
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)
N/A
USD 0
USD 10 per month if there’s been no login for 12 months
0.50%
Forex
CFDs
US shares
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.
Bell Direct Share Trading
AUD 15 or
0.1%
N/A
No
N/A
ASX shares
mFunds
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 or
0.1%
USD 19.95
AUD 15 per month if you make no trades in that period
0.60%
ASX shares
Global shares
Forex
CFDs
Margin trading
Options trading
mFunds
Access a broad range of investment products from Australia and overseas.
Invest in managed funds, trade shares, warrants, options and CFDs listed across the ASX, SSX and Chi-X, and other major global exchanges, including US, Canada and UK markets.
ANZ Share Investing
AUD 19.95
AUD 59
No
0.60%
ASX shares
Global shares
Margin trading
Options trading
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 or
0.11%
USD 19.95
AUD 63.50 per year on the global markets account
0.60%
ASX shares
Global shares
Options trading
US shares
loading

Compare up to 4 providers

Important: Share trading can be financially risky and the value of your investment can go down as well as up.

Data indicated here is updated regularly
Name Product Minimum Opening Deposit Minimum Spreads for Major Currencies Commission Minimum Trade Size Platforms
Plus500 Forex Trading
AUD 100
0.7 - 3.0 pips
$0
0.01 lots
Plus500 Web Trader
Margin FX is a complex financial product and traders are at high-risk of losing all of or more than their initial investment.
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.
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
Margin FX is a complex financial product and traders are at high-risk of losing all of or more than their initial investment.
eToro Forex Trading
USD 50
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).
City Index Forex Trading
AUD 0
0.5 - 1.22 pips
$0
0.01 lots
MetaTrader 4
At Pro
Advantage Web
Margin FX is a complex financial product and traders are at high-risk of losing all of or more than their initial investment.
Choice of trading platforms, integrated Reuters news and device-synching so you can monitor trades across multiple devices.
IG Forex Trading
AUD 0
0.6 - 1.5 pips
$0
1 lot
MetaTrader 4
ProReal Time
Margin FX is a complex financial product and traders are at high-risk of losing all of or more than their initial investment.
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.
Blueberry Markets Forex Trading
$100
From 0.0 pips
$0
0.01
MetaTrader4, MetaTrader5
Margin FX is a complex financial product and traders are at high-risk of losing all of or more than their initial investment.
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
Margin FX is a complex financial product and traders are at high-risk of losing all of or more than their initial investment.
ThinkMarkets Forex Trading
No minimum for standard account, $500 for pro account
From 0 pips
$7 per trade
0.01
MetaTrader4, MetaTrader5, ThinkTrader
Margin FX is a complex financial product and traders are at high-risk of losing all of or more than their initial investment.
Trade forex, commodities and CFDs using MetaTrader4/MetaTrader5 platforms or access advanced analysis tools through ThinkTrader.
FP Markets (Standard Account)
AUD 200
0.1 - 1.1 pips
$0
0.01 lots
MetaTrader 4
MetaTrader 5
Margin FX is a complex financial product and traders are at high-risk of losing all of or more than their initial investment.
Low minimum opening deposit, real-time news and pricing, and customisable alerts based on news or technical trading indicators.
loading

Compare up to 4 providers

Disclaimer: CFDs and forex are complex financial products that come with a high risk of losing money. Most retail client accounts lose money trading CFDs and forex. Consider whether you can afford to lose your money.

Name Product Past Performance - 1 Year Past Performance - 3 Years Past performance - 5 Years Calculated fees p.a. on $50,000 balance
AustralianSuper - Pre-mixed, Balanced option
17.03%
10.4%
9.41%
$461.18
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.
Sunsuper Lifecycle Balanced
15.35%
9.6%
8.99%
$533
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
14.54%
9.53%
8.96%
$395
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.
Virgin Money Super - Lifestage Tracker
21.02%
9.9%
N/A
$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.
HESTA - Core Pool
14.03%
9.02%
8.4%
$533.53
HESTA is an industry super fund for the health and community services sector and open to all Australians. The Core Pool invests in a mix of asset classes without taking on too much, or too little, risk.
Future Super Renewables Plus Growth
9.24%
N/A
N/A
$958.60
Future Super is Australia's first 100% fossil fuel free super fund and is certified by the Responsible Investments Association Australia. The Renewables Plus Growth option has a 20% asset allocation in renewable energy projects.
Australian Catholic Super Lifetime - Grow
14.25%
N/A
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.
loading

Compare up to 4 providers

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 December 2019.

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 Min Bal / Min Deposit Interest Earned
Rabobank Online Savings High Interest Savings Account
2.25%
0.8%
1.45%
$0
$0 / $0
Maximum variable rate of 2.25% p.a. for 4 months, reverting to a rate of 0.8% p.a. No deposit or withdrawal conditions. Available on balances below $250,000
Rabobank Online Savings High Interest Savings Account
0.55%
0.55%
0%
$0
$0 / $0
Maximum variable rate of 0.55% p.a. for 4 months, reverting to a rate of 0.55% p.a. No deposit or withdrawal conditions. Available on balances below $100,000,000
Rabobank Online Savings High Interest Savings Account
0.55%
0.55%
0%
$0
$0 / $0
Maximum variable rate of 0.55% p.a. for 4 months, reverting to a rate of 0.55% p.a. No deposit or withdrawal conditions. Available on balances below $1,000,000
MyState Bank Bonus Saver Account
1.75%
0.15%
1.6%
$0
$0 / $0
Ongoing, variable 1.75% p.a. when you deposit at least $20 into the account each month and make five or more Visa Debit card transactions from a linked MyState transaction account.
Citibank Online Saver
2.05%
0.35%
1.7%
$0
$0 / $0
Introductory rate of 2.05% p.a. for 4 months, reverting to a rate of 0.35% p.a. Available on balances below $500,000.
Citibank Online Saver
2.05%
0.35%
1.7%
$0
$0 / $0
Introductory rate of 2.05% p.a. for 4 months, reverting to a rate of 0.35% p.a. Available on balances below $500,000.
Bankwest Hero Saver
1.25%
0.01%
1.24%
$0
$0 / $0
Ongoing, variable 1.25% 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
$0 / $0
Ongoing, variable 0.01% p.a. rate when you deposit at least $200 each month and make no withdrawals. Available on balances up to $250,000.
HSBC Serious Saver
2.1%
0.15%
1.95%
$0
$0 / $0
Receive a maximum variable rate of 2.1% p.a. for 4 months, reverting to an ongoing rate of 0.15% p.a. for each month you don't make any withdrawals from the account. Available on balances below $1,000,000.
loading

Compare up to 4 providers

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.
MyState Bank Online Term Deposit
0.95%
1.20%
0.80%
0.95%
1.25%
1.25%
1.05%
Single or joint account-holders can apply online with MyState's online application process.
Pay no account setup or ongoing fees and choose a term length between 3 months and 2 years, with interest paid at maturity.
Citibank Term Deposit $10,000
1.05%
-
-
1.05%
-
1.05%
-
Suited to customers with deposits between $10,000 and $249,999.
This term deposit is for new Citibank customers only
Citibank Term Deposit 250K
1.35%
-
-
1.35%
-
-
-
A short-term investment option with a guaranteed rate of return.
Suited to customers with deposits over $250,000.
loading

Compare up to 4 providers

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.
Back to top

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.
Back to top

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.
Back to top

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

Related Posts

Ask an Expert

You are about to post a question on finder.com.au:

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • finder.com.au is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked

Finder only provides general advice and factual information, so consider your own circumstances, or seek advice before you decide to act on our content. By submitting a question, you're accepting our Terms of Use, Disclaimer & Privacy Policy and Privacy & Cookies Policy.
Ask a question
Go to site