When it comes to financial agility, most Australians think in terms of cash or credit. But in 2025, ‘near money’—those highly liquid assets that sit just a step away from cash—are commanding new attention. As banks, fintechs, and regulators reshape the landscape, understanding near money is crucial for anyone seeking both flexibility and security in their financial life.
What is Near Money? Cutting Through the Jargon
Near money refers to assets that aren’t physical cash but can be quickly and easily converted into cash with minimal loss of value. Classic examples include savings accounts, term deposits, Treasury notes, and high-quality short-term government securities. In Australia’s current environment, even some digital assets and select managed funds are beginning to fit the bill, as access and liquidity increase.
- Savings accounts: Instantly accessible, often with competitive interest rates, especially as RBA rates remain elevated in 2025.
- Term deposits: Offer higher returns than transaction accounts, but may require notice for early withdrawal.
- Money market funds: Traditionally the domain of big investors, but now widely available via neobanks and fintech platforms.
- Treasury notes and government bonds: Secure, low-risk, and now easier to buy and sell thanks to digital trading platforms.
The critical trait of near money is liquidity—how fast you can access your cash without a significant penalty. As the economy adapts to post-pandemic realities and ongoing global volatility, having a portion of wealth in near money assets offers vital flexibility.
Why Near Money Matters More Than Ever in 2025
With the Reserve Bank of Australia’s official cash rate holding steady at multi-year highs, savers are finally seeing meaningful returns on their cash-like holdings. But there’s more to the near money story:
- Interest rate volatility: Term deposits and high-interest savings accounts are now offering rates not seen since 2012, making them attractive for parking emergency funds or short-term goals.
- Economic uncertainty: Ongoing global tensions and the lingering effects of supply chain disruptions have Australians favouring liquidity and safety over risk.
- Regulatory innovation: ASIC’s 2024–25 push for greater transparency in deposit and money market products means consumers can compare options more easily than ever.
- Tech-enabled access: Fintechs now let users split funds across multiple near money assets in a single app, maximising both safety and yield.
For everyday Australians, this means the traditional choice between ‘cash under the mattress’ and volatile investments is no longer the only game in town. Near money products now bridge the gap—offering fast access, capital security, and a decent return.
Smart Strategies for Using Near Money in Your Financial Plan
So how can Australians harness near money to their advantage in 2025? Here are some practical strategies:
- Emergency funds: Keep three to six months of expenses in a high-interest savings account or short-term deposit. With interest rates above 4% p.a. at several banks, your safety net can actually grow.
- Short-term goals: Planning a holiday or major purchase within the next year? Use a term deposit with a maturity date that aligns to your timeline, locking in today’s rates.
- Cash flow management for small business: Many business transaction accounts now offer sweeping features, automatically moving surplus funds into higher-yielding near money products overnight.
- Digital diversification: Platforms like Raiz and Spaceship allow micro-investing in government-backed bonds and money market funds, giving everyday savers institutional-grade liquidity and safety.
Real-world example: In 2025, a Sydney couple saving for a home deposit used a combination of a high-interest savings account (earning 4.25% p.a.) and a rolling series of 3-month term deposits. This approach maximised their returns while ensuring they could pounce on a property opportunity without penalty.
What’s Next? The Evolving Role of Near Money
With digital wallets, instant payments (via the New Payments Platform), and ongoing regulatory shifts, the definition and utility of near money will only expand. Keep an eye on:
- CBDCs (Central Bank Digital Currencies): The RBA’s pilot continues into 2025, with the potential to create new forms of instantly-accessible, government-backed near money.
- Embedded finance: Expect more apps to offer seamless movement between near money assets and everyday spending, blurring the line between savings and transactions.
- Green near money products: Several Australian banks now offer ‘climate-linked’ term deposits, where returns are tied to sustainable lending targets.
The bottom line? Near money isn’t just a relic of old-school banking. In 2025, it’s a dynamic, tech-enabled safety net for anyone who values both access and earning power.
