Cash is at the whim of the government.<p>When Icesave crashed in 2008, the Icelandic government refused to honour deposit insurance. I haven&#x27;t followed the case, but it seems that depositors have started getting their money back. Cyprus confiscated 48% of all uninsured deposits in 2013, IIRC, at the time, they considered digging into the insured deposits as well. Greece was on the brink of leaving the Euro, imposing strict capital controls for over a month last summer. Had they left the Euro, all deposits would like have been forcefully converted to a new non-Euro currency, worth substantially less.<p>Finally, practically all mature countries (ie. those issuing cash you might want to hold) maintain some level of inflations, so you have a constant, negative return on any cash holdings. Even US treasury bonds and UK gilts, which isn&#x27;t cash, and isn&#x27;t &quot;not investing&quot;, but is among some of the absolute safest investments, just barely keeps up with inflation.