Short term investments for large balances (1 to 12 months)

The right short term investment for a large balance is the one whose timing matches yours. At-call accounts and term deposits keep capital stable but pay close to the cash rate. Wholesale investors can also co-fund short term loans secured by Australian property, with terms of 1 to 12 months and returns of 12% to 18% p.a. on the loans they choose.

This guide is for people holding a large sum for months rather than years. It is written by HomeSec Business Finance, an Australian private lender founded in 2004, which funds most of its loans itself and invites wholesale investors to co-fund some of them.

Who needs somewhere to park capital for 1 to 12 months?

Large short term balances usually come from a life event, not a plan. Common situations include:

• You have sold a business and have not decided what comes next.
• You have sold a property and are waiting to buy another, or to settle.
• You are rolling term deposits and are tired of low real returns.
• You have received an inheritance or a payout and want time to think.
• You are between investments, such as waiting for a fund to return capital or a project to start.

In each case, the money has a job to do on a known or likely date. That changes the question from “what pays most?” to “what pays well and is back when I need it?”

What are the short term investment options in Australia?

The table compares the main choices, with rates as at September 2026.

The Financial Claims Scheme limit matters more as balances grow. To keep $2 million fully covered in deposits, you would need at least eight separate banks.

Where can you park money for 6 months?

Six months is long enough for rate differences to add up, and short enough that you cannot afford to be locked in. As an illustration, before tax and using simple interest:

The term deposit figure uses the 12-month rate for simplicity; six-month rates vary by bank. The co-funded figures assume the loan is repaid on time and the capital is lent for the full six months.

The gap is large, but so is the difference in what backs each one. A deposit has government backing up to the limit. A co-funded loan is backed by a registered mortgage, the equity in the property and the loan documents.

How do 1 to 12 month secured loans fit your timeline?

HomeSec’s loans are short term business loans for 1 to 12 months, secured by registered first and second mortgages over Australian real estate. That range lines up closely with most parking periods.

You choose the term. Each loan’s pack shows its term, alongside the property, the LVR, the borrower and the rate. If you need your money in eight months, you can pass on a 12-month loan and take a four- or six-month one instead.

You choose whether to go again. When a loan is repaid, principal and interest go straight to your own bank account. You can review the next pack or simply stop. There is no minimum period of involvement.

You can get out early. If plans change, HomeSec will buy out your share and repay your principal. Our guide to getting your money back explains how maturity and buy-outs work.

For the full process from pack to settlement, see how co-funding works.

What are the risks of parking money in a short term loan?

Every option above the first rung asks you to accept some risk. For a co-funded loan, the main ones are:

• Late repayment. A borrower can repay after the maturity date. If a date is fixed, such as a settlement, choose a loan that matures well before it and keep a buffer in cash.
• Default. If a borrower does not repay, the loan can be enforced and the property sold. The maximum LVR of 80% on residential property, lower on commercial, leaves an equity buffer, and HomeSec meets the legal costs of recovery on defaulted loans.
• Concentration. One loan is one borrower and one property. Larger balances can be spread across several loans.

The risks are different from a pooled fund’s. In August 2026, Centuria Bass paused redemptions on two credit funds, with an expected pause of two to six months. For money you need back on time, a pause like that is a serious problem. We cover this in can I get my money out of a mortgage fund?

What are the 12-month investment options?

Twelve months widens the field. You can lock in a 12-month term deposit, commit to a pooled term account, or co-fund one 12-month loan or several shorter ones in sequence.

A sequence of shorter loans has one advantage for parked money: each maturity is a natural checkpoint. If your plans become clearer halfway through the year, you can stop taking new loans and let your capital come home.

Some investors combine options. They keep enough in an at-call account to cover anything they might need at short notice, hold a term deposit maturing near a known date, and put the rest into secured loans whose terms end before that date. Our guide to alternatives to term deposits ranks the wider choices by risk.

What might this look like after selling a business?

Consider an illustration. A business owner sells their company and receives $2 million in March. They plan to buy a commercial property, but the right one has not come up yet, and they expect to settle within 9 to 12 months.

One way some investors approach this:

If the right property appears early, the at-call money covers the deposit and the owner can ask for an early buy-out of a loan if needed. If it takes longer, the loans can be rolled into new ones as they mature. This is an illustration, not a recommendation; the right mix depends on how certain the date is.

Does it matter which entity holds the money?

It can. Proceeds from selling a business or property often land in a company, a trust or an SMSF rather than a personal account. Co-funding can be done in the name of an individual, company, trust or SMSF, and the loan agreement and mortgage are in that entity’s name.

Interest is income, taxed at that entity’s rate, and it is not subject to GST. Investors living overseas generally pay 10% interest withholding tax, or a lower treaty rate. Your accountant can confirm the right structure before you invest.

How do you get started?

Write down when you need the money and how much of it you must have back on that date. The rest is choosing options with terms that fit inside it. If you’d like to see how a 1 to 12 month secured loan looks from the inside, register your interest and our Funding Manager will be in touch.