The Guide Top Ten: Diversity is the key to low-risk investment rewards

1 TAKE THE TAX BREAKS

Returns on cash deposits are particularly low at present, reflecting the current low interest rate environment. Great news for borrowers, but bad news if you rely on interest payments for part of your income. The simplest way of boosting the interest rate that your bank or building society offers is to make it as tax efficient as possible. Is your spouse on a lower marginal rate of income tax than you? If so, put deposits in the lower tax payer's name to stop the taxman snatching up to 50 per cent of your annual interest. You could also consider investing with National Savings & Investments, which includes tax-free options in its range of products

2 ISA BENEFITS

Taxpayers should always do better within the tax-free individual savings account (Isa) environment, as long as you obtain a competitive rate. The taxman allows a married couple to put up to 10 200 a year into cash Isas, or up to 5,100 each, but remember to review the rate on your cash Isa regularly in order to ensure that it remains competitive.

3 SHOP AROUND

As with searching for any "best deal" you have to shop around to get the best rates of interest on your cash. This is made easier by a number of internet searching services but you will still have to invest some time to get the most suitable rate. Beware of the ploys employed by some banks and building societies such as offering an attractive introductory rate which reverts back to a very low rate. Regularly review the rate you receive and be prepared to move your cash.

4 CHECK THE SMALL PRINT

Check all of the terms of the deal you are being offered. Are you prepared to wait until the end of the year to receive your interest or do you need it monthly? Do you want to access your cash via a high street branch? Can you invest a regular amount? Each of these factors can affect the rate you receive.

5 SPREAD YOUR MONEY

Current Financial Services Compensation Scheme regulations will compensate you for losses up to 50,000 in the event of your savings provider going bust. If you have more than that with one institution you should consider spreading your money amongst different deposit takers so that you have no more than 50,000 with any one of them. If you are tempted to deposit money "offshore" you should carefully investigate what protection, if any, is in place.

6 BEWARE PSEUDO CASH FUNDS

Be careful if you are considering investing in a cash fund as opposed to a simple cash deposit.

Recently, investors got a shock when what they thought was a pure cash fund dropped significantly in value. The fund actually invested in cash and "cash type" mortgage-backed assets.

7 TAKE A LONG-TERM VIEW

Interest rates for investors who are willing to leave their money untouched for several years are normally far higher than short term deals. Currently, you could boost your interest rate by over 25 per cent by investing for a four-year period rather than just 12 months.

8 DIVERSIFY

Cash investments are generally very secure but they typically deliver lower long-term returns than higher risk assets such as bonds, equities and property. In order to access higher returns you could consider building a portfolio which consists of bonds, cash and equities. A good financial adviser can help build a portfolio that won't lose you any sleep.

9 BEST OF BOTH WORLDS?

Several products currently available claim to offer potentially higher, stock market returns with downside protection – for example, they guarantee that you will not lose any money, normally over a set period. This could be a good idea if you want higher long term returns but are also concerned about losses, but these products use what are often complex mechanisms in order to deliver their guarantees. Get advice if you are not familiar with how they work and remember that if it seems too good to be true, it probably is.

10 DRIP-DRIP

If you are particularly worried about getting the timing of equity investment wrong you might consider "dripping" your money in, perhaps in monthly instalments, thereby minimising the impact of a market fall just after you invest.