While cash investments may not be best suited to counter inflation, they remain a secure and sound investment for short-term periods of investment.

Cash investments are liquid, relatively safe and have short-term investment periods—up to six months maturity. These offer guarantee of principal but, generally, lower returns.

While checking and savings accounts have traditionally been considered cash investments, there are several other types available:

Bank and Savings Accounts. Offered at most banks and credit unions. These have guarantee of principal, or FDIC insurance up to a certain amount, but typically earn less in return.*

Money-Market Mutual Funds. Invest solely in short-term debt instruments. They can be converted quickly to cash and provide additional services to the shareholder, such as personal checking accounts. Don't get this confused with a bank money market — money-market mutual funds are not FDIC insured, however, they are considered safe because the types of funds that they may be invested in are limited.

Certificates of Deposit (CDs). Certificates or short-term obligations of commercial banks, savings and loans, or other financial institutions usually range from three months to five years. Note: only CDs with six months in maturity or less should be considered liquid investments.*

Treasury Bills. Short-term debt instruments issued by the United States Treasury or T-bills are purchased at a discount and mature in one year or less from their issue date. For example, if you purchased a $1,000 26-week T-bill, you would pay $975 for it, and in 26 weeks, when the T-bill matures, you would get $1,000.*

Savings Bonds. Issued by the U.S. government. The different kinds of bonds are E and EE bonds, H bonds and I bonds. Face values range from $50 (EE bonds) to $10,000 (H bonds). Some savings bonds are purchased at half the face value and mature at face value. The maturity date depends on the rates of interest during the holding period.

Fixed Annuities. Issued by life insurance companies, the money invested accumulates tax deferred. Annuities can guarantee a set payment, as a lump sum or in periodic installments, for life or for a specified term during the payout phase.

Cash Value of Life Insurance. Issued by life insurance companies, it generates equity from the interest of other gains. This equity or cash value may be accessed through policy loans.

*Disclaimer: Bank accounts and CDs are FDIC insured up to $100,000 per account, per institution ($250,000 for self-directed retirement accounts); Treasury bills are guaranteed by the United States Federal Government for payment on interest and principal if held to maturity.