save or invest?

Should I save or invest?

If you’re not sure whether you should save or invest, the answer is probably both. It all depends on your goals and your financial situation. This guide covers the basics to help you plan out your finances for short term savings and long term investment.

What’s the difference between saving and investing?

• Saving is putting money aside bit by bit, to make a lump sum. You usually save for a particular goal, like having the money for a holiday, a deposit on a house, or any emergencies that might crop up. Often saving is taken to mean putting your money into cash products, like bank and building society deposit accounts, and that’s how we define saving in this guide.
• Investing is taking some of your money and with the aim of making it grow, by buying things that might increase in value, like stocks, property or shares in a fund.

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• Rule of thumb

  • If you’ll use the money in under five years, save.
  • If you’ll use the money more than ten years in the future, invest.
  • If you’ll use the money in between five and ten years, then consider your attitude to different risks, your investment goal and financial situation. In this situation, it may be suitable that you do a bit of both saving and investing.
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