According to a recent study from the Center for Applied Research at State Street Corp, investors around the world are stockpiling cash. With 2008 etched in our memory banks, the 5 year bull market hasn't been able to move cash from under people's mattresses. The highest cash holding are in Japan at 57% while the lowest is in India at 26%. In the US, cash has risen from 26% in 2012 up to 36% in the first quarter of 2014. This may be a smart move after a huge run in the equity markets in 2013.

With the Fed's zero interest policy firmly in place, you have to look for creative ways to earn some return on your cash. Here are 3 ideas that may do better than a big fat zero:

1) Park the cash at an online bank

Online banks are offering higher money market and savings accounts than your typical bank on Main Street. They don't have overhead of local branches and they are willing to pay a small return on your cash. Just be sure to stay below the FDIC limits of $250,000 so your money is insured against any potential failure of the institution. I suggest going to to check out the best rates available. Right now Synchrony Bank is paying 0.95% and GE Capital Bank is paying 0.90%.

2) Buy Chinese Currency

If you live in Los Angeles or New York, you should open a Renminbi bank account at the Bank of China. Investing in Chinese currency makes for a good investment as the Chinese continue to liberalize their currency. While the Chinese take their time in appreciating their currency against the dollar, it has been a steady upward movement for the past 10 years. Note that this trade isn't without risk. Since the beginning of the year, the Renminbi has declined by close to 3% vs the dollar. However, US politicians often suggest that the Renminbi is undervalued by 20-40% so the trend is likely to continue upward. The Bank of China also has been giving out some of the best CD rates to its customers.

Chinese Currency

3) Buy a interest rate hedged ETF

Instead of buying a typical bond ETF where you have to worry about interest rate movements, Proshares has launched two interest rate hedged ETF products, High Yield (HYHG) and Investment Grade (IGHG) in the last year. Both ETFs own individual bonds and then short Treasuries to hedge the interest rate risk. These ETFs pay monthly dividends with HYHG's 30 day yield at 4.57% and IGHG at 3.45%. These products will likely work best in a stable environment. In times of panic and interest rate spreads widen, then these ETFs carry significant downside risk. If you buy either of these, it is probably best to put a stop loss very close to your purchase price to protect against the downside.

How is your cash invested? What are you earning on your cash?

“Cash Money” by athrasher is marked with CC0 1.0