Investing excess cash refers to the practice of using surplus funds that a company or individual has on hand to generate additional income. Instead of letting this cash sit idle in a bank account, it can be allocated to various investment vehicles such as stocks, bonds, or mutual funds. This strategy aims to enhance returns and grow wealth over time. By investing excess cash, individuals and businesses can take advantage of potential market opportunities and inflation protection. Proper investment choices can lead to increased financial stability and help achieve long-term financial goals, making it a crucial aspect of effective financial management.