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It can be easy to get the terms 'saving' and 'investing' confused because they're often used in place of each other when talking about finances. And although they both aim to grow your money, there are some important differences.
Pro: Your money is relatively secure, and you can access it whenever you like unless you've chosen a fixed term account
Con: The interest you get probably won't grow in value in real terms as it may not be rising at the same rate as inflation. So your money won't be able to buy you the same in the future. That's because prices of everyday goods increase over time in line with inflation. If your money isn't growing at the same rate, you won't be able to buy as much with it
Pro: Your money has more potential to grow in value and beat inflation over the medium to long term (at least five years)
Con: How much the value of your investment changes depends on a number of different factors, including where and how you've chosen to invest
Whether you choose to save or invest will largely depend on your financial goals. And it doesn't always have to be a choice between the two - it can be a blend of both.
Overall, if you need to access your money in anything less than five years, saving may be a better option that investing. Your money is generally secure in a bank or building society, whereas there are risks involved with investing. But if you're saving up for events happening further in the future (such as retirement) then investing might be the right choice.
You have options when it comes to investing money with Standard Life. Learn more about these here:
We have many guides, tools and articles that can help you understand investing and support your long term investment goals.