Instead of putting something away on your savings account every month, you could invest some of that money and end up getting more from your savings. The current low level of interest rates means that savings are earning hardly anything at all. Investments offer you a higher potential return. For instance, by deciding to invest half of your monthly savings, you can boost your return straightaway. At the same time, you have enough money on your savings account to cover any unexpected expenses.
Why combine investing and saving?
Inflation is higher than the rate of interest at the moment. This means that the cost of living is getting more expensive, whereas your savings earn hardly any interest. This has the effect of reducing the real value of your savings. However, you can counter that effect, for instance, by investing some of your savings in an investment plan.
Saving and investing every month
If you're used to putting a fixed amount aside each month in a savings account, you could always decide to start investing some of that money instead. The idea here is to generate a higher return with the amount you invest. The remaining amount will go into your savings account as usual and that can easily be accessed, if necessary.
Saving and investing for your child or grandchild
If you save a fixed amount each month on a savings account for your child or grandchild, you can invest a portion of that money too. The longer it remains invested, the higher the potential return. If your pride and joy is, say, three years old at the moment, the amounts you put aside will probably remain invested for the next 15 years or longer. That's quite a long period of time and may mean that you get a high return on your investment.
Want to open a savings account together?
A joint savings account or a personal savings account. Which should you choose?
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