Cash Investment
Cash investments are short-term, low-interest investments, like savings accounts or government bonds. That is, you are investing cash IN cash to get a tiny bit of interest in return for renting your dough. Low interest. Low risk. Safe.
In most cases when you're buying, say, a money market account, the cash you invest is insured by all kinds of government entities. At a bank savings account, it's usually FDIC insured.
For example, consider a small, freshly opened, donut and coffee shop. They're a new business, so they might not be able to estimate their costs accurately at the time of the grand opening. They don't have the experience just yet to be able to predict random things that might affect their supplies. In corporate parlance, a cash investment runs counter to an equity investment, where one company uses its stock (usually public so a value is easily assessed) as an investment in a strategic partner to make their interests more easily financially align.
A cash investment stays liquid, so if the company needs cash, they can get it easily.
Related or Semi-related Video
Finance: What is a Money Market Fund?80 Views
finance a la shmoop. what is a money market fund? isn't it a strange concept
to think about going to a market to buy money? [man walks through grocery store]
well yeah it's strange but the practice exists and it's a huge multi trillion
dollar market today. the key word here is money and not investment. why such a big
diff? well because the notion of investing implies duration. that is when
you invest in a nice fixer-upper home or a tractor distribution company or shares
in a fat dividend-paying bank you're investing for presumably a long time [people stand in line]
like years maybe decades maybe centuries if you can find the right miracle pill.
but here we're talking about money like the stuff you can buy candy with. so it's
short term not long and a money market fund basically comprises many series of
pretty safe bonds that are all coming due in the next 30 to 90 days. sometimes [pie chart]
longer than that sometimes shorter but generally in the very near future. so why
would you care about a money market fund? well because it pays you slightly more
interest on your money than say a bank checking account. and lots of people in
corporations need cash just sitting around to pay their bills, so there are
tons of money market funds out there available and that's the gist of a money
market fund. we're sure you'll have plenty of experience with them by the
time you hit your sixth hundredth birthday day [people cheer and hold birthday cake]