Security
Visit the websites of the major ratings agencies (Moody's, Standard & Poor's and Fitch) for an independent view on the creditworthiness of both the institution accepting your proceeds (ie, your bank) and the instrument you have chosen to invest in. While each agency uses different criteria for assessing credit risk, a system of letter-designated ratings range from AAA (indicating the strongest capacity for timely payment of financial commitments) to D (indicating actual or imminent payment default).
Be wary of purely chasing the best rate available without establishing the underlying credit risk, as higher rates of interest tend to be offered by institutions with a lower credit rating, with higher returns offset by a greater risk of non-repayment.
Liquidity
All businesses would typically have a core requirement of cash that needs to be kept liquid in order to meet day-to-day operations, and you should ensure that your investments provide you with access to cash that you need to keep your business trading.
Don't assume that funds are liquid where the security is high. An example would be where funds are guaranteed by the Government. In these situations, try to understand how quickly you can access your funds in the event that a claim needs to be made under the guarantee in order to secure repayment.
Consider establishing a treasury policy so that funds are always invested in line with your preferences around risk and liquidity. Typically, this policy would set out the minimum ratings grade required for a particular institution or financial instrument, and the period over which funds are permitted to be invested with institutions of a certain credit grade.
Yield
Security and liquidity both influence the return you will achieve on your investments (the yield). Higher risk investments put in over a longer term will result in a higher yield. To maximise return while maintaining liquidity, try to identify the core cash needed to meet day-to-day operations, and consider investing cash proceeds received over and above this into longer term investment products with an acceptable risk profile.