Difference Between Saving And Investment

Difference Between Saving And Investment

The main dissimilarities or differences between savings and investment can be pointed out as follows:

1. Introduction

Saving: Putting not spent money safely to fulfill future needs and emergencies

Investment: Putting savings in different assets and projects in order to build wealth and to make financial gain

2. Risk Involved

Saving: It involves no risk

Investment: It is more riskier than saving

3. Liquidity

Saving: It is highly liquid in nature

Investment: It is less liquid in nature

4. Money Back

Savings: Guaranteed

Investment: No Guarantee

5. Aim/Purpose

Saving: To meet short term needs

Investment: To grow wealth and make financial gain

6. Period

Saving: Short period

Investment: Longer period

 Also Read:

Difference Between Trading And Investing

7. Return

Saving: Much lower return than investment

Investment: Higher potential return than saving

8. Examples

Saving: Bank deposits, cash in hand etc

Investment: Stocks, debentures, mutual funds etc

Saving Vs Investment (Comparison Chart)

Basis For Difference	Saving	Investment
Introduction	Putting not spent income for future needs	Allocating money or saving in assets or projects for financial gain
Risk	No	Yes
Liquidity	More	Less
Money Back	Guarantee	Not guarantee
Aim	To fulfill short term needs	To build wealth
Period/Time	Short	Long
Potential Return	Lower	Higher
Examples	Bank deposit, cash in hand etc.	Mutual funds, stocks, dividend etc.

I hope this post is helpful to understand the difference between saving and investment and to make comparison between them.