Have you seen the interest rates on savings accounts these days? Many of the big banks are offering base rates of just 0.05% per annum.
This means that if you had $10,000 in one of these savings accounts, you would earn interest of just $50 a year.
I'm very confident that far greater returns can be found in the share market. As a result, I would be investing these funds into ASX shares if you have no immediate use for them.
But which ASX shares should you buy? Here are two I would snap up:
a2 Milk Company Ltd (ASX: A2M)
I think a2 Milk Company would be a good option for these funds. The infant formula and fresh milk company was a strong performer once again in FY 2020. It delivered a 32.8% increase in revenue to NZ$1,730 million and a 34.1% lift in net profit after tax to NZ$385.8 million thanks largely to strong demand for its infant nutrition products in China.
The good news is the company still only has a 2% value share of the mother and baby store market in the country. I believe this gives it a significant runway for growth over the next decade. It is also worth noting that a2 Milk Company ended the period with a cash balance of NZ$854.2 million. I expect these funds to be deployed on earnings accretive acquisitions over the coming years that could accelerate its growth.
Pushpay Holdings Group Ltd (ASX: PPH)
Another place to consider investing $10,000 is Pushpay. It is an exciting technology company which provides churches and not-for-profits with donor management and engagement solutions. The company has been growing its sales at a rapid rate over the last few years. Pleasingly, this growth has been particularly strong during the pandemic, with the crisis accelerating the adoption of its solutions with churches eager to engage with their congregation and adapt to the rise of the cashless society.
In fact, after delivering stellar growth in FY 2020, management expects an even stronger performance in FY 2021. It recently revealed that it expects to double its operating earnings this year. The good news is that I don't expect this growth to stop there. Pushpay still has a very long runway for growth over the next decade.
