Home Make Money What are the Important Differences Between Saving and Investing?

What are the Important Differences Between Saving and Investing?

What are the Important Differences Between Saving and Investing?
Dollar Seedling - Growth Concept - Sprout On Banknotes In Increase

There are many reasons why the financial markets are front and center in 2022 (although for financial advisors and wealth management professionals, the markets are always top of mind). Businesses are recovering from  unprecedented shutdowns. The remnants of the pandemic continue to challenge supply chains. We have a labor shortage. The government printed and distributed a lot of money to keep our economies afloat. Any single one of these occurrences would be enough to send waves through the financial markets. But all of them coming to bear within 2+ years may be a once-in-a-lifetime event for many of us. So, where does that leave us? Should we be saving? Should we be investing? Or both?  Read on for key differences between saving and investing.

Saving as a Financial Strategy

We save money for three primary reasons: security, emergencies and large purchases. It’s wise to have several months’ worth of living expenses saved in the event of a medical emergency, loss of income or other events. People also save money for life events, including weddings, vacations, holiday gifts, and perhaps your child’s college education. 

Most people save money in a savings account at a bank or at a credit union. There is very little risk to your money in a savings account. The government also ensures up to $250,000 per account in FDIC-insured banks. These accounts also offer minimal interest. 

Other people save money in Certificates of Deposit (CDs) or money market accounts.  While your money is typically safeguarded from risk in these accounts, they may not earn you much money in interest. Although, with the recent interest rate hikes imposed by the Federal Reserve and more rate hikes likely to come, you’ll be earning more in interest in the coming months than you likely were at this time last year. If your savings are in CDs, you may be penalized with fees for withdrawing from a CD before it has matured. 

Another benefit of saving money is access to your funds. You can access your money immediately from traditional savings accounts at banks or credit unions. You will not pay a penalty for withdrawing your money. If your money is saved in a money market account it may take a few days. 

Investing as a Financial Strategy

Investing is also a strategy for saving money but comes with various levels of increased risk as well as greater rewards. Unless you’re a day trader, investing is also a long-term strategy, and access to your funds in an emergency will not be immediate. 

However, investing allows you to put your money to work for you to make more money, known as a return on investment or ROI. Investments can be made through a variety of financial vehicles. They may include workplace retirement plans such as 401ks. Investments may also include bonds, mutual funds and Individual Retirement Accounts (IRAs), which a financial advisor can help you to select and manage. Other options for investing include real estate. 

Saving & Investing: How to Have Your Cake and Eat it Too

You don’t have to choose between saving or investing. No matter what you are earning,, prioritizing both saving and investing can provide the greatest benefits for achieving your financial objectives

Start by earmarking money for your savings goals each time you get paid. Put that money away no matter what. Likewise, if your employer offers a 401(k) matching plan, take advantage of it as soon as it’s made available. Over time, as you earn more, increase your contributions to both.

If your employer doesn’t offer a matching plan, if you’re self-employed, or if you have additional streams of income, schedule an appointment with an experienced, reputable financial advisor to help you create an investment plan that aligns with your goals. 

If you have $1 million or more in investable assets, please contact ICC Wealth Management for financial planning advice designed to help you develop a prudent, long-term strategy to grow and preserve your money. 


The Investment Counsel Company of Nevada (“Company”) is an SEC registered investment adviser located in Las Vegas, Nevada. Company may only transact business in those states in which it is registered or qualifies for an exemption or exclusion from registration requirements. Company’s web site is limited to the dissemination of general information pertaining to its advisory services, together with access to additional investment-related information, publications, and links. Accordingly, the publication of Company’s web site on the Internet should not be construed by any consumer and/or prospective client as Company’s solicitation to effect, or attempt to effect transactions in securities, or the rendering of personalized investment advice for compensation, over the Internet. Any subsequent, direct communication by Company with a prospective client shall be conducted by a representative that is either registered or qualifies for an exemption or exclusion from registration in the state where the prospective client resides. A copy of Company’s current written disclosure Brochure discussing Company’s business operations, services, and fees is available from Company upon written request. Company does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to Company web site or incorporated herein, and takes no responsibility, therefore. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly.

Please remember that different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment or investment strategy (including those undertaken or recommended by Company), will be profitable or equal any historical performance level(s).

ICC provides clear, unbiased guidance for female executives and it is backed by a team of experienced fiduciary financial advisors. To learn more about the services they offer, visit www.ICCNV.com