An introduction to savings & investments

Why save?

Often, people save for a specific reason and it’s usually the safest way to build up a pot of money.

It’s less risky than investing, but it offers limited growth. The most you’ll earn on the money you save is the interest added. Saving is perfect for people who don’t want to take any risks with their money, and most savings accounts have easy access or are for a fixed term.

There are many different ways to save, but whichever way you choose, the general idea is the same: to build up some money – savings – that can be used, for example, to make a large purchase such as a new fridge, go on holiday, pay for school fees or cover the cost of expensive times like Christmas.

Savings also provide security by making sure that some money is put aside for emergencies or unexpected costs.

What’s the difference between saving and investing?

Saving is a stage on the way to investing.

You cannot be an investor without being a saver – but you can be a saver without being an investor.

When someone talks about savings and saving money, it could be referring to a piggy bank on the mantelpiece or a high interest deposit account. Savings are effectively cash or cash instruments, such as deposit accounts or term bonds.

Investing is what you can do with the savings you have created – if you are looking to generate a return on your money that is greater than what is already available to you through your savings instruments.

As a saver, you will be taking very few and very small risks with your money.

As an investor you are taking a much greater risk. Not only is the return on offer to you likely not to be fixed or guaranteed, the capital sum you invest is at risk as well.

So why would anyone want to take such risks? The short answer, of course, is because the potential rewards may be greater and you want to generate more from your money than is possible by simply leaving it in a bank or building society deposit account.

Since there are so many different types of savings and investments, and there are potential risks with investments in particular, it is wise to seek expert advice which can be tailored to suit your own circumstances.

Speak to us today about the following:

  • Endowments
  • Equities
  • Unit Trusts
  • Investment Trusts
  • Capital Investment Bonds
  • Junior Isas
  • National Saving
  • Products ISAS
  • Collectives
  • Fixed Investments
  • Offshore Collectives

The value of investments and the income they produce can fall as well as rise. You may get back less than you invested. Tax treatment varies according to individual circumstances and is subject to change.

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St Edmundsbury Wealth Management Ltd offers advice to individual and corporate clients in Suffolk and across East Anglia. The firm has eight Financial Advisers with combined experience of 128 years. Their aim is to deliver good advice in a clear fashion, backed up by excellent service.

National Savings are not regulated by the Financial Conduct Authority.