When managing your money, saving vs. investing is one of the most critical decisions. While the two may seem interchangeable, they’re quite different regarding their purpose and potential benefits.
Savings, for example, are funds you set aside gradually, usually in a bank account, often for specific short-term goals like buying a car, making a down payment on a house, or covering unexpected emergencies.
The concept of savings refers to deferring consumption and setting aside money or assets for future use. This can be accomplished through different means, including deposit accounts, pension accounts, investment funds, CDs, or simply holding cash.