The difference between Savings and Investments
- Savings are Cash Deposits, Cash ISAs, National Savings products, Savings bonds.. The capital value of your money should be safe but returns may be relatively low and will normally lose real value to inflation over time.
- Investments are often assets. The idea is to buy cheap and sell later for a profit. Investments can include company share ownership, lending to businesses and governments, commercial or residential property purchase, commodity purchase. They can also include non asset backed vehicles such as derivatives. In the short term, you may be offered less than you paid and will have to hang on until the asset becomes popular again. Barring a disaster, investments should outperform savings in the long run.
A financial adviser should be able to recommend which products and product providers are suitable for you based on their knowledge of the market and taking into account your own needs, circumstances and wishes.