You’ve probably wondered what the difference between savings and investments is. You want to begin your wealth creation journey and are a bit confused; should you save your money or invest it?
Many people confuse these terms for the same thing. In this article, I explain everything you need to know about them.
- What are savings?
- What are investments?
- What is the difference between savings and investments?
- How to decide between savings and investments?
A lot of us are more familiar with savings and how they work, but we don’t know much about investments. We understand that investing your money might seem a little complex. So we’re here to simplify both terms so you can make great financial decisions.
What are Savings?
Savings are all about putting money aside. We advise you to save about 20% of your monthly income. This money can be towards future purchases and emergencies that may arise.
Savings are usually easy to access when they’re needed. In cases where your savings are in the form of fixed deposits, you may not be able to withdraw as you wish. The interest rates on savings accounts vary but with Cowrywise, we offer competitive returns that can be as much as 3x your bank’s offering.
What are Investments?
Unlike savings, investing is purchasing assets that may increase in value. These assets could be stocks, bonds, mutual funds or even real estate. They can also earn you a return on investment. The main aim of investments is to use capital to generate substantial financial gain.
Investments are usually aimed at accomplishing long-term goals. They also allow you to diversify and have different assets in your portfolio.
What is the difference between savings and investments?
There are quite a few differences between savings and investments:
1. Investing has an element of risk that savings don’t have. With investments, you could lose the money you invested( your principal). There is also the possibility that the interest rate is not fixed and may change.
2. Savings generally have lower interest rates compared to investments. While there is a higher risk factor with investments, they sometimes have high returns.
3. Savings are best for short-term goals, while investments are for long-term goals. Investing is best for long-term commitments to earn returns and grow wealth.
How to decide between Savings and Investments
You might need to decide how to divide your money between savings and investments. You have some spare cash, and you’re wondering whether investing or saving is the right choice. Don’t fret, we’re here to help you make that choice!
On Cowrywise, you have both options. If you’re planning a large purchase or building an emergency fund, savings are the best choice. Savings are also a great idea if you want to earn interest with zero risks.
One reason you should choose to invest is to have financial security since investments are best for achieving long-term goals. Lastly, investments are a great option to protect yourself from unforeseen economic instability. You can invest in other currencies like the dollar mutual fund on Cowrywise.
You can begin your saving and investment journey with Cowrywise. We’ve made it very simple to choose from a pool of mutual funds and create a custom savings plan that works for you.
Watch this video to learn more about saving and investing for beginners:
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Good evening, my question to you please if open an account today in naira his the money will converted to us dollar to running the account
If you are investing in a dollar fund, yes.
Can the funds be traded rather than investing to increase gains?
What if your money is in cash(Dollar)
Please I already have an account, will I have to re-open another account before investing in dollar?
Can I invest in the next eurobond using dollar (cash)? If yes, will my returns be in dollar as well or it will be converted to naira??
Hi Helen, you can invest in Eurobonds at any time. However, we only accept naira deposits at the moment. Also, your returns accrue in dollars.
So which is best to earn the second way or first?
Focusing on returns will be better
Hi, what is the minimum amount you can invest with.
Hi there. You can invest the naira equivalent of $100
Hi Ope, does that mean I’d need two accnts to operate the fund, I.e a naira account to put in the naira funds which is d only 1 u currently accept, then a domicilary account where my returns would accrue in?
I want to invest in your Eurobond.
I have re-installed your new app an still can get the eurobond plan?
How much is the minimum equivalent dollar for a start?
Can i get an overview of all the benefits and rules of this plan?
***and still can’t get the eurobond plan?
Do you allow people from south Africa
Hello, my question is if I invest in the dollar mutual fund how do I get the returns?
Will it be in naira or in dollars and will I have to open another account for the returns to go into
Can’t you go down to 50USD
Hello Nsikak, currently the minimum is $100 but we we are looking at a possible review in the future.
The new minimum is $10
Hello will I have to re-open another account before investing in dollar?
luckysolomon444@gmail.com
I have invested in dollars mutual fund… It means I Will get my return in one year
Hi Jonathan,
How is the return/interest on your investment from November 27,2020 so far??
No you don’t have to, just click on invest in mutual funds, you will see the options there. You can navigate and alot with your account.
If I invest in the euro bond, it is expected that my return accrues in dollar, right? And how do I withdraw the dollar? Do I need to convert it to naira, if yes, how can I convert my dollar to naira on the app. Lastly, how long do I need to leave my investment on cowrywise? Or can I withdraw anytime?
Am interested. Let’s say I put in a $1,000. What the ROI…within 1 year.
Your interest is 6.6% then calculate it for one year, I think so
Hello,
As a Nigerian, can I save my money in dollars even though I don’t want to invest in a dollar mutual fund?
Pretty soon, yes!
If l invest in naira am l going to get it back in dollar
You’d be getting it at the prevalent naira exchange value of the dollar.
Am going to save in naira am going to get it back in dollar
You’d be getting it at the prevalent naira exchange value of the dollar.
Hello ope pls how much is $10 in naira
How long does the investment last.i.e when can I get my returns
I will give BIG CONGRATULATIONS to the entire Management of COWRYWISE for this wonderful opportunity to be a good investor with simple and sound education on various investment opportunities an investment can be done with little and grow within a short period period of time
God bless
Thank you so much ?
Now if I put 100$ in one year what is my return
If my return will be in the current dollar rate at the time, when i am investing and when am getting my returns, what exchange rate do u use? Black market rates or the bank rates – please verify in each case. Thanks.
Hello please if you can create the one we can start with the minimum $1 we’ll be happy ??
I just started investing in eurobond funds on cowrywise. So far so good, it has been a good platform to invest money and earn back. Kudos to the team behind this platform