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Understand the fundamental contrast between savings and investing with our comprehensive guide. Get insights into the benefits of saving and investing, and discover the strategies that suit your financial aspirations.

Savings Vs Investing: Know the Difference

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"Savings Vs Investing: Know the Difference"

Pranav Karnad

Investments are easy to crack; Start your wealth journey here

<p>
    If you’ve just started earning, you might have questions like ‘what is saving and investment?’ or ‘should I save my income or invest it?’ Understanding the difference between savings and investment can help you find answers to these queries and create optimised personal finance strategies to build an emergency fund and a corpus of wealth over time.
   </p><h2>
    What is Savings?
   </h2><p>
    Savings refer to the funds you set aside to meet future expenses or tackle emergencies. In India, people save by depositing funds into a bank account or fixed deposit scheme to interest over time. You can save for various reasons, like funding a vacation, buying a car, or creating an emergency fund to help you in tough times.
   </p><h2>
    Pros and Cons of Savings
   </h2><p>
    Here are the advantages and disadvantages of savings:
   </p>

<h2>
    What is Investing?
   </h2><p>
    Investing refers to parking funds in assets like stocks and bonds that will help grow your money through capital appreciation. While investing comes with a higher risk quotient than savings, it also offers the possibility of higher yields. Most people use goal-based investment strategies to meet long-term financial goals, like buying a house or building a retirement corpus.
   </p><h2>
    Pros and Cons of Investing
   </h2><p>
    Here are the advantages and disadvantages of investing:
   </p>

<h2>
    Differences Between Saving and Investing
   </h2><p>
    The following table sums up the differences between savings and investments.
   </p>

<h2>Which is Better: Saving or Investing?</h2><p>Based on these savings and investing differences, it is clear that both are valuable building blocks of an air-tight financial plan. While you can fall back on savings for short-term goals and emergencies, investing can help secure long-term goals and build wealth over time. That said, the risk aspects of each also differ greatly. You can find the right mix between the two by evaluating your financial goals, risk appetite, and income.</p><h2>Invest Through Fi App</h2><p>Users can find several investment options on the Fi app. Be it short-term or long-term — it's easy to invest with a simple swipe of your phone's screen. If you want to save up for a short-term goal &amp; earn interest on it, select our super-flexible Smart Deposit. If you're looking for higher/stable returns, opt for a Fixed Deposit. You can also <a target="_blank" rel="noopener noreferrer" href="https://fi.money/us-stocks">invest in US stocks</a> from India through the Fi Money app.</p><h2>Frequently Asked Questions</h2><h3>1. What is the main difference between savings and investment?</h3><p>Saving money is to store it away until you need it, while investing refers to the purchase of assets with a desire to earn profits and grow your wealth.</p><h3>2. How does saving differ from investment in terms of risk and return?</h3><p>Typically, savings bring you low returns against zero risks, while investments come with higher risks and a potential for higher returns.</p><h3>3. What are some examples of savings vehicles and investment vehicles?</h3><p>Common savings vehicles in India include savings bank accounts, FDs, and RDs, while stocks, bonds, mutual funds, and ETFs are common investment vehicles.</p><h3>4. Why is it important to understand the difference between saving and investing?</h3><p>Understanding the difference between savings and investing can help you better manage funds and design a better financial plan.</p><h3>5. How can an individual determine whether to save or invest their money?</h3><p>You can choose between the two by assessing your current needs and future goals. For instance, if you don’t have enough saved to cover 3-6 months' worth of expenses, it's best to prioritise that over investing for long-term goals. If you have an emergency fund in place, you can start investing.</p><p>‍</p><p>‍</p>