Getting the most from your money

While both investing and saving aim to improve your financial well being, investing is more about aiming to accumulate money over the long term, to provide you with some future financial security. Saving, on the other hand, generally means putting money aside for the shorter term, which could be to help pay for a holiday, a special occasion, a child’s education and so on.

In a savings account your money is secure, generally accessible and gives greater certainty about growth. But in exchange for this security, you will normally only receive a modest return which reflects the current rates of interest available.

Investing, on the other hand, has the potential to bring bigger rewards over the longer term as many investments are linked to the movement of the stock market, which could provide a greater return than you could expect from a bank or building society savings account. However, because the value of stocks and shares will go down as well as up, it also carries a greater risk and you may not get the returns you expect. Unlike a bank or building society savings account your capital is not secure and you may get back less money than you originally invested.

Take a look at this Money Made Clear Budgeting Guide (PDF New Window) which provides useful information on how to make your budget work harder for you.