Savings Vs Investing, which one is better?

Nowadays, people, regardless of how old they are, are paying more attention to finance. However, many people are also confused about which is the better choice between saving money and investing. This time, ACU PAY therefore compares savings and investment to understand the purpose more clearly and know the difference between savings and investment.


The purpose of saving is to keep money from disappearing, for future purposes such as buying a house, condo, car, concert ticket, shoes, or emergency funds.

Savings are usually accumulated in the form of deposits with banks because there is a low risk or nearly no risk such as savings accounts, fixed deposit accounts, and GSB lotteries. Even though they earn only 0.5 – 0.75%, it is profitable. Thus, savings are the safe way to keep money rather than earn high returns.

Advantages of Savings

It is suitable for all ages and genders because of its low risk and high liquidity, so it can be withdrawn in cash at any time. It’s suitable to save for emergencies and has no impact on the economy or stock market.


Disadvantages of Savings

The lower returns compared to investments, get the returns as specified by financial institutions.  This is not suitable for those who want to continue and get the returns.


What kind of savings should be chosen to suit your age?

– Childhood: piggy bank or open a savings account.

– Working age: savings accounts, fixed deposits, Government Savings Lottery, Endowment Insurance, provident funds.

– Retirement age: Government Savings Lottery, Fixed Deposits, National Savings Fund (NSF)


The purpose of the investment is to increase the amount of existing money and have risk from low to high risk. The higher the risk, the more returns such as stocks, mutual funds, debt securities, business investments, real estate, derivatives, etc. Of course, we have to accept higher risks of losing our investments in exchange for greater opportunities for a better return. Investing is more of using money to get a return than keeping the money safe. 

Advantages of Investment

High yield opportunities and more channels to get returns such as interest, dividends, or investment gains. Some investments have the power to manage assets such as private businesses, and real estate. Some funds can be tax-deductible, such as Super Savings Funds (SSF) and Retirement Mutual Funds (RMF).

Disadvantages of Investment

With lower liquidity than savings, it is difficult to turn back into money. If the projections are wrong, there is a high possibility of losses, especially if there is a lack of knowledge or understanding.

Which is better, savings or investments?

To choose which is better would be difficult to answer because savings and investment depend on the purpose of the user. However, it would be better if we chose to do both at the same time, with money saved for the present, with investments that give long-term returns and create wealth for the future.

Always choose to save before investing.

After saving 6-12 times your monthly expenses, consider investing in a variety of funds by choosing investments that fit your acceptable risk and the purpose of that investment to create wealth in the future.

Finally, whether our money is in savings or investment, the most important thing to focus on is financial management and clear financial goals to achieve.


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