Savings Or Investment: Which Practice Suits You More?
2. No risk involved in savings but investment does
Yes! It’s true that savings are risk free. Whatever savings you have stored in the safety vault will be safe and also these savings will not generate any returns over the years. Also if your money is kept in a savings account then the rate of return provided by the savings will be negligible. Let’s assume that your money is in an FDIC-insured savings account, then there is either no risk or minimum risk as your funds are insured by the Federal Deposit Insurance Corporation (FDIC). Alternatively, if you invest your money in products like gold, stocks and mutual funds then the risk attached is more and it might grow rapidly over years.
3. Money increases in investments not in savings
Investing is taking one step forward in the making money process. Once if you have a good amount saved, then you can think or start to invest your money. Investing is one of the best ways that will help you begin to grow your money and build wealth rapidly. Amount of interest will be very small if you are planning to keep your hard earned money in a savings account. However, if you start investing in products like mutual funds or stocks, your interest rate will be very high.
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