How to invest $5,000 in Australia

There are plenty of options for savvy investors.

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A common myth about investing is you need to have a large amount before you get started.

In reality, investors can start small and through the wonders of compound interest can quickly improve their financial position.

So, if you have a few thousand and are wondering what you should be doing with it, here's some handy hints as to where you could invest $5,000.

Compare investment and trading accounts

Name Product Standard brokerage fee Inactivity fee Markets International
eToro (global stocks)
US$0
US$10 per month if there’s been no login for 12 months
Global shares, US shares, ETFs
Yes
Zero brokerage share trading on US, Hong Kong and European 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 currencies from the one account.
IG Share Trading
$8
$50 per quarter if you make fewer than three trades in that period
ASX shares, Global shares
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, plus get access to 24-hour customer support.
Superhero share trading
$5
No
ASX shares, US shares, ETFs
Yes
Earn up to 15,000 Qantas frequent flyer points when you transfer an exisiting balance or trade. Offer valid for all new and existing Superhero members until 28 February.
Pay zero brokerage on US stocks and all ETFs and just $5 (flat fee) to trade Australian shares from your mobile or desktop.
GO Markets Share Trading
$7.70
No
ASX shares, Forex, CFDs, ETFs
No
Pay zero brokerage on your first 20 trades and $7.70 after that on over 2,500 ASX listed shares from either your desktop or mobile.
ThinkMarkets Share Trading
$8
No
ASX shares
No
$8 flat fee brokerage for CHESS Sponsored ASX stocks (HIN ownership), plus free live stock price data on an easy to use mobile app.
Saxo Capital Markets (Classic account)
$5
No
ASX shares, Global shares, ETFs
Yes
Access 19,000+ stocks on 40+ exchanges worldwide
Low fees for Australian and global share trading, no inactivity fees, low currency conversion fee and optimised for mobile.
HSBC Online Share Trading
$19.95
No
ASX shares, mFunds, ETFs, Bonds
No
Limited-time offer: Join HSBC’s online trading account before 28 February 2022 and HSBC will reimburse you up to $100 on your first 5 trades. Also traders who transfer $50k+ will get a $200 bonus(T&Cs apply).
Make trades online with brokerage fees starting from just $19.95 with an HSBC Online Share Trading account. Plus gain access to complimentary expert research, trading ideas and tools.
SelfWealth (Basic account)
$9.5
No
ASX shares, US shares
Yes
Trade ASX and US shares for a flat fee of $9.50, regardless of the trade size.
New customers receive free access to Community Insights with SelfWealth Premium for the first 90 days. Follow other investors and benchmark your portfolio performance.
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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 is the cost to purchase $1,000 or less of equities without any qualifications or special eligibility. Where both CHESS sponsored and custodian shares are offered, we display the cheapest option.

Name Product Minimum Opening Deposit Minimum Spreads for Major Currencies Commission Minimum Trade Size Platforms
Vantage Forex Trading
AUD 200
0.0 pips - 1.0 pips
$0
0.01 lots
MetaTrader 4
MetaTrader 5
TradingView
Disclaimer: CFD Service. Your capital is at risk.
Spreads start from 0.0 on major currency pairs and you get some of the lowest forex trading fees in Australia. Plus you can place trades and find global trends through the TradingView charts platform.
eToro Forex Trading
USD 200
1.0 pips
$0
US$200 (to CopyTrade)
eToro Trading Platform
Note: This broker offers CFDs which are volatile investment products and most clients lose money trading CFDs with this provider.
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 200
1.0 pips
$0
N/A
Plus500 Trading Platform
Disclaimer: CFD Service. Your capital is at risk.
Minimum spreads of 0.01% for major currencies. Customers should visit Plus500's website for updated spreads in real time.
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
0
0.6 - 1.5 pips
$0
1 lot
MetaTrader 4
ProReal Time
IG Trading Platform and Apps
L2
Disclaimer: CFD Service. Your capital is at risk.
Choice of trading platforms. Choose optional extras like advanced charting, reporting and order types. Over 90 currency pairs to choose from.
AvaTrade Forex Trading
$100
AUD/USD is 2.2 pips or 1.5 pips for EUR/USD
$0
0.01 Lot
MetaTrader4
AvaTradeAct web trading
AvaOptions
AvaTradeGO
Automated Trading
Disclaimer: CFD Service. Your capital is at risk.
Enjoy minimum spreads of 0.01% for major currencies pairs as well as gain access to trading crypto currency pairs through Avatrade.
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
Disclaimer: CFD Service. Your capital is at risk.
Saxo Forex Trading (Classic Account)
AUD 3,000
0.5 pips
$0
$1000
SaxoTraderGO
SaxoTraderPRO
Disclaimer: CFD Service. Your capital is at risk.
Trade majors, minors, exortics, crypto and spot metals on Saxo's award-winning trading platfrom.
City Index Forex Trading
0
0.5 - 1.22 pips
$0
0.01 lots
MetaTrader 4
At Pro
Advantage Web
Disclaimer: CFD Service. Your capital is at risk.
Choice of trading platforms, integrated Reuters news and device-synching so you can monitor trades across multiple devices.
Blueberry Markets Forex Trading
USD 100
From 0.0 pips
$0
0.01
MetaTrader4, MetaTrader5
Disclaimer: CFD Service. Your capital is at risk.
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
Disclaimer: CFD Service. Your capital is at risk.
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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 Last 1 year performance (p.a.) Last 3 year performance (p.a.) Last 5 year performance (p.a.) Last 10 year performance (p.a.) Fees on $50k balance (p.a.)

AustralianSuper - Pre-mixed, Balanced option

Finder Award
AustralianSuper - Pre-mixed, Balanced option
+20.46%
+9.6%
+10.46%
+9.74%
$476
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.

Spaceship GrowthX

Spaceship GrowthX
+23.41%
+15.25%
New Fund
New Fund
$536
This is a high-risk investment option that aims to deliver high returns over the long term.
Spaceship's GrowthX fund invests heavily in technology ETFs with high exposures to Australian and international shares. Performance figures and fees supplied by Spaceship, not Chant West.

Sunsuper Lifecycle Balanced

Finder Award
Sunsuper Lifecycle Balanced
+20.62%
+8.77%
+9.84%
+9.06%
$558
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.

Virgin Money Super - LifeStage Tracker

Virgin Money Super - LifeStage Tracker
+22.17%
+10.04%
New Fund
New Fund
$363
Virgin Money Super LifeStage Tracker has one of the lowest fees in the market and has strong 3 year performance. It invests in a mix of assets in line with your age, reducing your risk as you near retirement. The investment team was named a Responsible Investment Leader 2020 and 2021 by the Responsible Investment Association Australasia.

Australian Ethical Super Balanced

Green Company
Australian Ethical Super Balanced
+17.96%
+10.33%
+9.67%
+9.01%
$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.

Aware Super Growth

Aware Super Growth
+18.02%
+8.81%
+9.8%
+8.97%
$519
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.

QSuper Lifetime - Aspire 1

QSuper Lifetime - Aspire 1
+17.11%
+9.02%
+8.61%
New Fund
$360
QSuper is one of the largest profit-for-members funds in Australia. QSuper Lifetime continually adjusts your investment mix in line with your age and your super account balance.

HESTA Balanced Growth

HESTA Balanced Growth
+19.03%
+8.48%
+9.39%
+8.87%
$533
HESTA is an industry super fund for the health and community services sector and open to all Australians. The Balanced Growth fund invests in a mix of asset classes without taking on too much, or too little, risk.

Australian Catholic Super Lifetime - Grow

Australian Catholic Super Lifetime - Grow
+17.36%
+7.42%
New Fund
New Fund
$528
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.
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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 2021.

Disclaimer: Performance, fees and insurance data are 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 and 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.

Name Product Maximum Variable Rate p.a. Standard Variable Rate p.a. Intro Period Government Guarantee
Westpac Life (18-29 year olds only)
2.5%
0.15%
Ongoing
Virgin Money Boost Saver (25+ year olds)
1.2%
0.1%
Ongoing
AMP Saver Account - 1.35% from 1 Feb 2022
1.35%
0.1%
Ongoing
Rabobank High Interest Savings Account
1.35%
0.25%
4 months
Bank of Queensland Fast Track Starter Account (for 14-24 year olds only)
2%
0.05%
Ongoing
Virgin Money Boost Saver (18-24 year olds)
1.2%
0.1%
Ongoing
Citibank Online Saver
1.1%
0.35%
4 months
Bank of Queensland Fast Track Saver Account
1%
0.05%
Ongoing
Virgin Money Grow Saver
0.65%
0.1%
Ongoing
Westpac Life
0.25%
0.15%
Ongoing
MyState Bank Bonus Saver Account
1.1%
0.05%
Ongoing
Great Southern Bank Home Saver Account
0.95%
0.05%
Ongoing
Bank of Queensland WebSavings Account
0.65%
0.05%
4 months
Bankwest Hero Saver
0.45%
0.01%
Ongoing
HSBC Flexi Saver Account
0.25%
0.05%
Ongoing
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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.
Citibank Term Deposit $10,000
0.40%
-
-
0.40%
-
0.40%
-
Suited to customers with deposits between $10,000 and $249,999.
This term deposit is for new Citibank customers only
MyState Bank Online Term Deposit
0.30%
0.30%
0.25%
0.70%
0.35%
0.80%
1.20%
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.
Rabobank Term Deposit
0.45%
-
-
0.75%
-
0.75%
0.50%
Suited to customers with deposits between $1,000 and $2,000,000.
With a Rabobank Term Deposit you will receive a competitive rate on your deposits and the choice of a 1, 3, 6, 9 or 12 month term.
Judo Bank Term Deposit
0.88%
-
-
0.97%
-
1.12%
1.20%
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.
ME Term Deposit
0.35%
0.35%
0.40%
0.50%
0.50%
0.60%
1.10%
You can link the ME Term Deposit with the transaction account of your choice, at any other Australian financial institution.
Choose whether to have interest paid annually, monthly or at maturity.
Bank of Queensland Term Deposit ($5,000 - $249,999)
0.20%
0.15%
0.15%
0.35%
0.20%
0.50%
1.00%
ING Term Deposit
0.05%
0.05%
-
0.07%
0.10%
0.22%
0.25%
Pay no fees for your term deposit, and choose a term length from three months to two years.
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Should you invest your money?

When it comes to investing, it's important to understand that there's always a risk versus reward payoff. 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.

What are my options if I want to invest $5,000?

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.

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 that 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 and ETFs

Investment funds allow 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 from an increase in share prices.

The minimum initial investment in Australian shares is usually $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. Fail to do so and you may 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, you may need access to additional cash if your broker makes a margin call. A risk to keep in mind is that in the end you could lose more money than you’d started off with.

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. Traditionally, you would have to start with something similar to get into the share market. However, investors who shop around can enter the market for as little as a few dollars both in Australia and with 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 about a savings account?

Putting your money into a savings account won't give you the returns you might want but it comes with the least risk meaning if you need access to the funds over a shorter period it could be helpful.

Australia's current cash rate is at a record low 0.01%.

And while you'll get more than this from most savings accounts, you will probably still go backwards when you include inflation.

However, savings account has a major benefit of being guaranteed returns and government backed. This means if an investor places up to $250,000 into a bank account, even if the provider collapses the government will guarantee your savings.

But it's worth noting it is to a maximum of $250,000 meaning anything above this is not guaranteed. Instead, investors could open multiple accounts with different providers.

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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 in 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 the time to find out the cost of 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. Assessing your your willingness to take risks and understanding how it can affect your judgement is what makes up your personal risk profile. By going through the process of risk profiling you address aspects like risk capacity, risk required and risk tolerance. This helps you find out your 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 much money you’ll require when the time comes.

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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