Apr 21, 2023
Financial Literacy

Investing and saving: Same same, but different


re you guilty of using the terms investing and saving as though they’re the same? Don’t be shy, it’s a super common occurrence. As we’re here to help people build their financial literacy and make the most of opportunities to grow their wealth, we think it’s rather important that you understand the key differences between investing and saving.

Investing Saving Retirement Funding
  • Grow wealth
  • Long-term financial goals
  • Preserve money
  • Short- to medium- term goals like emergency funds, travel or wedding expenses
  • Investing or saving explicitly to fund retirement years
  • High risk, higher rewards
  • Unlimited growth based on market performance
  • Capital at risk, growth more likely to beat inflation
  • Low risk, lower rewards
  • Growth limited by interest rates
  • Capital preserved, but value likely to be eroded by inflation
  • Varies depending on investment or savings vehicles used
  • Months to years, depending on goals
  • Usually 1-5 years or less
  • Super-long term, decades
Asset examples
  • Stocks and ETFs, bonds or real estate
  • Savings accounts, cash accounts or money markets accounts
  • Retirement annuities or pension funds and plans
Cash availability (liquidity)
  • Varies depending on asset, but typically unavailable for longer periods
  • Easy access
  • Usually inaccessible until retirement age

From the comparison, you can see that saving and investing have their differences when it comes to purpose, risks, asset types and cash availability (also known as liquidity).

Let’s have a closer look at investing and saving, shall we?

The purpose of investing and saving

Saving means to set money aside for a specific purpose. Like that dream holiday in Phuket, once-in-a-lifetime wedding in the Maldives, or a deposit on that perfect property as your first owned home. It’s also good ‘adulting’ to have a stash of cash put away for emergency purchases or situations (like global pandemics, for example!).

The Importance of Investing and Saving for Adults

Saving is typically for a short to medium time period, with money put into a dedicated savings account or money market account with a financial institution. Returns on savings are linked interest rate, so they’re limited, but could, in most circumstances, be guaranteed, making for easier goal planning and management.  

Investing, on the other hand, is more strategic and with the intention of growing wealth for more general use. Like funding those ‘golden years’ of retirement. Investing is more focussed on the long-term, both in terms of purpose and commitment, as you’ll need to understand how to research and choose assets for investing. When it comes to investing your hard-earned money, asset selection shouldn’t come down to a guessing game – which is how Nemo gives you an edge by identifying investment opportunities.

To invest, you’ll buy assets such as stocks and ETFs, bonds or real estate. A general rule is that funds should be invested for longer than 3 – 5 years. As returns are based on market performance and the expected appreciation of asset value, investing offers uncapped earning potential and wealth growth. But investing isn’t without risks.      

The risks and rewards of investing vs saving


When compared side by side, investing has more risk involved as you may lose some of or all your original investment (called capital). It’s no wonder that losing money is one of the most common fears of potential investors! The stock market, for example, can be volatile and the value of your investments can go up or down, depending on market conditions. This is why risk management is a crucial element of investing, and you’ll need to learn how to manage your investment risk to minimise losses.

As investing is intended to be a long-term commitment, you’re advised to use funds that you’re not likely to need to use in the foreseeable near future. While assets like stocks can be sold and the funds retrieved relatively quickly, investing in real estate, for example, will make the cash value unavailable for a long time. Depending which way you look at it, this could be considered either a risk or a reward of investing.

On the flip side of that risk is a potentially higher reward. For example, you may receive regular cash outs from dividend paying stocks, or perhaps you identified AI as a potential area for exponential growth. These strategic choices, backed by market analysis (and maybe even a nudge from a timely Today’s Strong Buys neme), allow for practically unlimited potential opportunities, as results are driven by market performance.

Benefits of investing:

  • Likely to grow wealth over time, as investment assets historically outperform inflation
  • Investing could provide passive income, through dividend-paying stocks or real estate rental income
  • Investing may help you beat inflation


Savings are accepted as being a safer option as risk is far lower than investing. After all, the goal of saving is to preserve your capital. Savings accounts, and the like, are often able to offer guaranteed interest rates for at least a certain period. And if those rates are fixed, you can calculate returns right down to the last fil!

As savings are generally cash based assets and don’t involve a lengthy or complex sale, access to money is readily available should you need it.

Benefits of savings:

  • Achieve specific financial goals, by setting aside money regularly
  • Saving can provide a sense of security and help you feel more financially stable
  • Saving can help you avoid debt by having the funds available to not have to take a loan

But these low risks mean that the rewards are possibly lower too.  

The interest rates offered are typically quite low, and they may not even keep up with inflation. So, while your capital figure may be preserved, the real-life value may decrease, as inflation erodes away the buying power of currency.

Invest or save – what’s it going to be?

So, when does it make sense to save and when is it time to invest? The answer depends on your individual financial goals and circumstances.

If you still need basic financial stability, have short-term goals or unable to accept risk, saving may be the better option for you (for now).

But if your financial goals are more long-term and you’re comfortable with taking on some risk, you’ll find investing to be more valuable.

Ultimately, you want to find yourself in a position to be doing both simultaneously, covering both your short- and long-term financial objectives.

And if that sounds like you, remember to check out Nemo that’ll deliver investing opportunities to the palm of your hand, so that you never miss out.

Vee Tardrew

Vee Tardrew is an experienced copywriter with an extensive career in marketing within the fintech sector. She's passionate about investments, emerging technologies, and opportunities that can bring about positive change in the world. Prior to bringing her love for words to the Exinity team, Vee led content creation for a pioneering cryptocurrency investment firm for close on a decade. As a creative soul with a technical mind, Vee is adept at storytelling to simplify complex topics and won't pass up an opportunity for a tasty food analogy.