Saving vs. investing

Compare some differences between saving and investing.
Saving Investing
Ready cash
Gives you ready cash; provides funds for emergencies; often used for specific purchases in the near future (usually three years or less)
Achieve major goals
Can help you achieve long-term, major financial goals
Minimal risk
Minimal or no risk (if money is in a savings account)
Always involves risk
You may lose some or all of the money you invest
Earn interest
You earn interest, but savings accounts generally earn a lower return than do investments
Potential for profit
Investments have the potential for higher return than a regular savings account.
Your investments may appreciate (go up in value) over time.
This increases your net worth, which is the value of your assets (what you own) minus your liabilities (what you owe).
If you sell for higher price than you invested initially, you make a profit.

Read more information about bonds, about mutual funds, or about stocks.

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