Some times, we assume savings is investment. However there are a whole lot of differences between savings and investment. It’s good we are in the know of them. Below are a few:
- Savings is short term while investment is long term
- Savings has little rate of return and little or no risk of loss while investment has potentials for higher rate of both return and risk of loss
- Savings is for emergencies and purchases while investment is for future large expenses and life events
- Savings is putting money aside gradually while investment is to grow your money to help in capital formation and providing returns
- Savings is highly liquid while investment has low liquidity.
Bottom line, know when to invest and know when to save.
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