10 Best Financial Assets to Hold in Australia for 2026

The Best Financial Assets to Own in Australia will be covered in this post.

Australian investors can secure their capital, create income, and accomplish long-term financial goals with a variety of options ranging from growth-focused managed funds and superannuation to low-risk government bonds and term deposits.

Comprehending these assets facilitates the development of a robust and diverse portfolio.

What is Financial Assets?

Financial assets, like cash, stocks, bonds, or bank deposits, are intangible assets that signify a claim to future economic rewards. Financial assets get their worth from a contract or ownership rights that can produce income, capital gains, or both, in contrast to tangible assets like real estate or machinery.

They let investors to diversify portfolios, protect capital, and make long-term financial plans. They are an essential tool for wealth growth, income generation, and risk management. Government and business bonds, term deposits, shares, managed funds, and superannuation accounts are examples of common financial assets in Australia.

Benefits Of Financial Assets to Hold in Australia

Wealth Preservation – Placing financial assets in government bonds and term deposits will protect your capital from the losses of other investments.

Regular Income – Bonds and investments in other financial instruments will pay you fixed interest over time.

Portfolio Diversification – With the purchase of equities, bonds, and funds you will be less reliant on one asset, therefore spreading the risk.

Growth Potential – Superannuation, equities, and managed funds can appreciate in value over time.

Liquidity & Flexibility – Cash management accounts, savings, and certain bonds can be sold and converted to cash easily.

Tax Advantages – When invested in superannuation and certain managed funds, the growth of the investment will be taxed less.

Inflation Protection – Some investments in the form of Treasury Indexed Bonds offer protection against inflation.

Professional Management – No time needed on your part for investment management with managed funds or superannuation as there are industry experts on your side.

Low-Risk Options – With government guaranteed bonds or term deposits, you will find an investment with significantly lower risk.

Support for Retirement Planning – Superannuation and other long-term financial assets will offer you value in the form of financial security in the years to come.

Key Point & Best Financial Assets to Hold in Australia List

Investment Option	Key Point
Australian Government Bonds (Treasury Bonds)	Low-risk, government-backed fixed-income securities with predictable interest payments.
Treasury Indexed Bonds (TIBs)	Inflation-protected bonds; principal and interest adjust with CPI to preserve purchasing power.
State Government Bonds	Medium-risk; issued by state governments to fund projects; slightly higher yields than federal bonds.
Corporate Bonds (Investment Grade)	Fixed-income debt from financially strong companies; higher returns than government bonds, moderate risk.
Bank Bonds & Notes	Debt securities from banks; provide fixed interest, regulated but carry slightly higher risk than government bonds.
Term Deposits	Fixed interest on a lump sum for a set period; low-risk, predictable returns, liquidity limited until maturity.
High‑Interest Savings Accounts (APRA‑regulated banks)	Flexible access to funds with competitive interest rates; low-risk and government-insured up to a limit.
Cash Management Accounts (CMAs)	Combines banking and investment features; easy liquidity, earns interest, often linked to short-term investments.
Managed Funds (Balanced/Hybrid/Income)	Professionally managed diversified portfolios; mix of equities and fixed income for risk-adjusted returns.
Superannuation Funds (Diversified Options)	Retirement-focused, long-term growth via diversified investment options; tax-advantaged and regulated.

1. Australian Government Bonds (Treasury Bonds)

Investments bonds issued by the Australian government or Treasury Bonds are long-term securities the Australian government issues, raising funds for the country, and backed by the government.

Since Treasury Bonds pay a fixed interest rate and only accrue value in the long term, they are some of the safest financial assets in Australia. Bonds are extremely liquid as they can be traded at the Australian Securities Exchange (ASX), and conservative or risk-averse long-term investors looking to preserve their wealth have the opportunity to do so through these Bonds, thus further proving they are some of the best financial assets to hold in Australia.

Australian Government Bonds (Treasury Bonds) Features, pros & Cons

Features:

• They are fixed-income securities provided by the government of Australia.
• Have a maturity period of 1-30 years.
• Interest is paid twice a year.

Pros:

• There is little chance of default due to the government backing.
• The income is predictable and received on a regular schedule.
• There is a high level of liquidity on the secondary market.
• Great for diversification of your portfolio.
• These can be bought using ETFs that are specific to bonds.

Cons:

• The income is lower compared to the income that can be received from corporate bonds and stocks.
• The value of the bonds can change due to interest rate fluctuations.
• The inflation protection is limited to inflation protection on TIBs.
• They are not a good fit for portfolios that are aiming for high growth.
• Selling the bonds early can lead to a loss of capital.

2. Treasury Indexed Bonds (TIBs)

Treasury Indexed Bonds (TIBs) are bonds issued by the government that protect investors from the risks associated with inflation. The principal value of TIBs increases with the Consumer Price Index (CPI). This means that the inflation-adjusted principal value will exceed the negative inflation rate over time. The interest payments rise with inflation so that they will always be at a minimum level of positive real interest rate.

TIBs are effective in providing a positive real return in most economic settings. Bonds of this nature rehabilitate the inflation protection limited investment opportunities. For investors seeking investment in financial assets with a minimum credit risk in Australia, TIBs are considered one of the best assets as they provide predictable income, value security, and protect the investor from increased costs of living.

Treasury Indexed Bonds (TIBs) Features, pros & Cons

Features:

• These are bonds that are linked to inflation (CPI).
• They are provided by the Australian Government.
• The interest on the bonds and the principal that has been paid are adjusted for inflation.

Pros:

• These bonds provide protection against inflation.
• The bonds come with very low credit risk associated with them.
• They are stable and provide a predictable income.
• The interest is paid out biannually.
• They help greatly in preserving wealth.

Cons:

• The yield from the bonds is lower on years with low inflation.
• The bonds are not as liquid compared to the government bonds.
• In the long-run, the bonds may lead to underperformance of equities.* Difficult for beginner investors.

3. State Government Bonds

State Government Bonds are the Debt Securities that the Australian state governments in order to finance their capital works and development programs. These bonds have a low-risk profile as they are backed by government and they offer a slightly higher interest rate than the federal bonds.

The investment option is available in diversified maturities which provides the investor with the flexibility to select short-term or long-term strategy. Liquidity of these bonds is good as they can be easily obtained via brokers or ASX listings. For investors seeking low credit risk and dependable return State Government Bonds are one of the best financial assets to have in Australia as these bonds also help in local community development.

State Government Bonds Features, pros & Cons

Features:

• Bonds from Australian state governments.
• Bonds are used to finance specific projects undertaken by the state.
• Bonds pay fixed interest over a specific period.

Pros:

• Very low credit risk (backed by state).
• Income is predictable and assured.
• Result in tax benefits in some instances.
• Diversification in governmental debt is a plus.
• Can be sold in secondary markets.

Cons:

• Higher risk than federal government bonds to some degree.
• Corporate bonds result in a higher return on investment.
• Interest rate risks impact the bonds overall value.
• Returns are decreased by inflation.
• Less available than federal bonds.

4. Corporate Bonds (Investment Grade)

Investment-grade corporate bonds are fixed-income instruments with interest rates higher than what government bonds pay. Corporations that have a strong financial base issue these corporate bonds. These corporate bonds are moderately risky since the repayment is based on the company’s financial position.

For investors who seek a constant return on income with modest higher yields, investment-grade corporate bonds are the best. These bonds are protective, diversify equities and do improve risk position for investor along with equities. For these investors in Australia, the corporate bonds are excellent financial instruments on the market, and offer a good combination of stability, income, and systemic risk mitigation.

Corporate Bonds (Investment Grade) Features, pros & Cons

Features:

• Bonds issued by financially sound corporates.
• Bonds = Rated BBB or higher (investment grade).
• Bonds pay a fixed interest for the term.

Pros:

• Yields are higher than government bonds.
• Income is predictable.
• Useful for portfolios focused on income.
• Predictable income if held to maturity.
• Bonds are useful for diversifying from government debt.
• Can be traded in secondary markets.

Cons:

• Bonds have a higher default risk.
• Price risk if interest rates fluctuate more.
• Company performance affects bond prices.
• Market for corporates is less liquid.
• Less liquid compared to government bonds.
• Not a good option for aggressive growth investors.
• Capital loss if early sale.

5. Bank Bonds & Notes

Australian banks issue Bank Bonds and Notes to raise debt capital. These financial instruments offer fixed interest payments for a specific duration and the yields are above government securities. Although these are safe and regulated, the risk on with these bonds is a little higher than the risk on government bonds. Retail investors can access these and buy bonds on secondary markets.

For investors seeking consistent income, regulated safety, and financial market exposure without equity market volatility, Bank Bonds and Notes are among the best financial assets to hold in Australia. These financial instruments allow investment in the financial sector without the volatility associated with equities.

Bank Bonds & Notes Features, pros & Cons

Features:

• Capital is collected by banks.
• Interest rates could be fixed or floating.
• Terms are generally between 1 to 7 years.

Pros:

• Predictable interest income and income sources.
• Higher yield is received compared to government bonds.
• Interest income is predictable.
• Bonds are from regulated institutions.
• Bonds are tradable in secondary markets.

Cons:

• There is moderate default risk compared to government bonds.
• There is sensitivity to interest rates.
• There may be call features.
• There are no government bonds to provide full protection.
• There is complexity in understanding this for beginners.

6. Term Deposits

They are a form of investing where a certain sum of money is guaranteed to be kept with a bank for a certain period of time and for that money, a certain interest rate is guaranteed. Term Deposits are extremely low-risk making them perfect for preserving money with guaranteed returns. Access to the money is limited until the matured period is over; however, making a withdrawal is sometimes possible but with a fee.

Term deposits fits best with short to medium term goals of finances like maintaining emergency funds or having a conservative portfolio for investing. Term deposits, for those looking for custodial safety and guaranteed results, are and remain some of the best financial assets to hold when in Australia, being simple, secured, and providing a fixed income.

Term Deposits Features, pros & Cons

Features:

• Investment is low risk.
• Fixed interest for a set term.
• They are fixed deposit accounts with banks.

Pros:

• There is simplicity in management.
• There are flexible terms.
• There is protection under the government deposit guarantee.

Cons:

• There are limitations to inflation protection.
• The amount of interest is nothing.
• Returns are usually lower than bonds or equity.
• There are penalties for early withdrawal.
• The funds are locked in until the deposit has matured.

7. High‑Interest Savings Accounts (APRA‑regulated banks)

While earning a competitive rate of interest, High-Interest Savings Accounts (HISAs) in APRA-regulated Australian banks offer simple and efficient access to funds. These accounts are perfect for emergency savings, short term savings goals, or as a place to hold funds temporarily before making an investment as they offer liquidity and flexibility.

HISAs are low-risk accounts as they offer positive daily interest making them suitable for conservative investors. One of the best financial assets to hold in Australia, these accounts allow for safety in finances, earning interest, and having the economy funds to be withdrawn if needed.

High-Interest Savings Accounts (APRA Regulated Banks) Features, pros & Cons

Features:

• Savings account with interest offered by banks.
• The account is accessible any time.
• Interest rates may not always be fixed.

Pros.

• Account has high protection from risk.
• The account has a high degree of liquidity.

• Easily open/manage.
• Having no market exposure.
• Emergency funds can be completely safe.

Cons:

• Most investment options have returns that are higher.
• There can be fluctuations in interest rates.
• Real value can be eroded through inflation.
• There are limitations on wealth growth potential.
• No advantages when it comes to taxes.

8. Cash Management Accounts (CMAs)

CMAs involve a combination of banking and investments where depositors can have their capital earning some interest while retaining easy access to their money which is usually tied to short-term, low-risk investments. This CMA is flexible and allows depositors to make a number of deposits, withdrawals, and transfers while retaining a higher interest rate relative to other standard savings accounts.

This is perfect for such investors who need liquidity and are willing to allow their funds to earn some interest as they have no other banks to put their funds. Therefore, for Australians who want an easy and low-risk method of managing their cash while earning interest, cash management accounts are some of the most financially secure accounts to have in Australia.

Cash Management Accounts (CMAs) Features, pros & Cons

Features

• Savings account and investment account.
• provides interest and quick withdrawals.
• connected to investment platforms.

Pros:

• 100 percent liquidity.
• higher interest.
• benefits access to investment platforms.
• Capital is safer than stocks.

Cons:

• lower returns than other cash investments.
• account fees are possible.
• unsatisfactory growth for longer terms.
• Interest risk.
• Inflation reduces returns.

9. Managed Funds (Balanced/Hybrid/Income)

In Managed Funds, money is pooled from many investors to form a diverse portfolio of investments which is then managed by an investment fund manager. A balanced or hybrid fund is one that contains some mix of equities, fixed income, and cash while trying to achieve investment growth to some target and is therefore not very risky.

Managed funds are one of the most outstanding financial assets to have in Australia for those in need of long-term sustainable growth with an added diversification of risk and professional management.

Managed Funds (Balanced/Hybrid/Income) Features, pros & Cons

Features

• Portfolios are managed professionally.
• Spreading investments across stocks, bonds, and cash.
• Suitable for medium risk.

Pros:

• Management is professional.
• Spreading investments has less risk.
• Suitable for passive investment.
• Access to many investment classes.
• Freedom to choose investment amounts.

Cons:

• management fees lower investment returns.
• risks to market are still present.
• Less control to individual investments.
• Performance is at the mercy of other fund managers.
• Possible fees to exit early.

10. Superannuation Funds (Diversified Options)

Superannuation Funds are long-term, retirement-oriented investments, with option diversification across equities, bonds, and cash. Contributions are tax-sheltered, and the funds grow over decades to pay retirement income.

Diversified superannuation options are designed to manage the trade-off between risk and growth, with the variations being professionally managed to optimize returns. Investors benefit from long-term compounding, with the investments being safeguarded.

Because of the combination long-term growth potential, along with being professionally managed, and the required disciplined savings, superannuation funds are regarded as one of the best assets one can hold in Australia to grow retirement wealth.

Superannuation Funds (Diversified Options) Features, pros & Cons

Features:

• Accounts for investing for retirement for the long term.
• Investment options with varying levels of risk (growth, balanced, conservative).
• Contributions and earnings are tax-effective.

Pros:

• Tax benefits (concessional contributions).
• Investments are managed with professional help.
• Wealth can be accumulated over the long term.
• Investments can be distributed among several asset classes.
• Money can grow with compounded interest over the years.

Cons:

• You cannot access the funds until you reach retirement age.
• Returns are subject to market risk.
• Growth can be reduced due to management fees.
• Investment options are not flexible.
• Long-term growth can be detrimentally affected by weak performance in markets.

Conclusion

In conclusion, investors with different risk tolerances, investment horizons, and income objectives can find a wide variety of financial assets in Australia.

There are safe solutions for steady yields and capital preservation, ranging from low-risk products like Australian Government Bonds, Treasury Indexed Bonds, term deposits, and high-interest savings accounts to moderate-risk products like business bonds, banknotes, and state government bonds. Superannuation accounts and managed funds offer expert management and exposure to a variety of asset types for long-term development and diversification.

These are some of the best financial assets to own in Australia because they allow investors to attain financial security, wealth preservation, and growth when they choose the appropriate combination of these assets.

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