Saving Versus Investing

Many individuals save money, many invest, and there are a lot who do both in order to grow their wealth. But some do not know the difference between saving and investing, which is something that is important to know. Both can yield returns, but one may work better than the other depending on how the accounts are managed.

As part of a regular estate planning checkup, you may also find that having one of both accounts - a savings and an investing account - can prove to be profitable for you. You can make your money grow for you as long as you invest properly and ensure that you don't invest more than you can afford to lose.


A savings account is the safest method in which to make your money grow, but it is also the slowest method. This is because the account gains interest and this interest may be gained at a maximum amount of just over 4%. Most savings accounts are between 3% and 4%. This is guaranteed growth, but how much you earn in interest depends on how much you deposit.

Basically, the more you save the more interest you are going to gain. If you simply keep around $100 in your account, it is not going to gain much at all. What you will receive each payout period is pocket change. If you can't deposit a significant amount of money, you need to develop a plan in which you can grow your savings account and not touch it.

For example, you may make it a goal to deposit $25 for every paycheck you get in order to make your savings account grow. If you can deposit more, that is great, but don't deposit more than what you can afford to or you will be withdrawing it as soon as you deposit it. You have to let the money sit in the account for it to gain any interest.

Any time that you can afford to deposit more, do that. The idea behind your deposits is so you do have money for a rainy day. You are also saving for your future. Wouldn't it be great to have some money to fall back on when you retire?


Investing is a completely different way of making your money grow and it requires risk, whereas savings accounts don't have a risk. But what you do here is you choose investments that you want to invest your money in. You have to make sure they are good investments, though, or you could lose your money rather quickly.

You may want to employ the services of a personal financial advisor who can help you with a financial plan that will allow you to deposit money into savings and will also allow you to invest your money. Investments will grow faster than a savings account, but the investment must be the right one. For example, you may want to invest in a mutual fund or straight stocks.

What a financial advisor does for you is evaluate the best investments for you. You can choose your degree of risk. For instance, high risk has the highest risk of losing money, but can yield the largest and fastest returns than something that is a low risk. What you do is up to you. As you get used to investing and you build your portfolio, you can try different investments, as well as different strategies.

So now you see the difference between saving versus investing. You may also notice that both are great ways for you to use your money to make money. And they are great ways for you to invest in your future.

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