Investment v/s Simple Savings

Investment and savings are both important financial strategies, but they serve different purposes and have different benefits. While savings involves setting aside money for future use, investment involves using money to generate more money over time.

Here are some reasons why investment can be better than savings:

1. Higher returns: Investments generally offer the potential for higher returns than savings accounts, especially over the long-term. With savings accounts, the interest rates are usually low, while investments can offer higher returns in the form of capital gains, dividends, or interest. While the current fd rates are 6.5% or just above one can upto 10-15% intrest through investing in SIPs.
2. Beat inflation: Inflation can erode the purchasing power of your savings over time. Investments that provide returns higher than inflation can help you beat it and maintain the value of your money over the long-term.
3. Diversification: Investments can be diversified across different asset classes, such as stocks, bonds, real estate, and commodities. Diversification can help spread risk and potentially increase returns.
4. Compound interest: Investments can benefit from compounding, where returns are reinvested to generate additional returns over time. Compounding can help your investments grow faster than savings accounts.
5. Achieve financial goals: Investments can help you achieve financial goals such as buying a house, starting a business, or retiring comfortably. Savings accounts may not provide enough returns to achieve these goals.

However, it’s important to remember that investing also involves risk and requires careful consideration of your financial goals, risk tolerance, and investment strategy. Before making any investment decisions, it’s advisable to seek the advice of a financial professional.