Savings and Investment is sometimes used interchangeably. Both mean different to different people.
“Savings” term is normally used when people talk about allocating some money out of their income for future consumption. Principal amount is important. While “Investment” term is used when people deploy money in financial products to achieve better returns. Returns, and not principal is important. There is a thin line between the both but here I list down general perception that is associated with both.
|Risk||Considered less risky||Associated with some risk|
|Returns||Returns is an afterthought||Returns are important|
|Liquidity (accessibility)||Considered available anytimeC||Can have some lockin|
|Goals||Short term goals||Long term goals|
|Examples||Fixed deposits, Liquid Funds||Equity Mutual Funds, Stocks|
While savings is considered good when it comes to risks and liquidity, Investments are for higher returns. Just imagine if you can get the best of both the worlds?