Saving and investing basics

Quick intro

If you take only one message away from this section of the website, it's this: be wary of investment scams. Protect yourself! If someone contacts you with information on an investment scheme that sounds too good to be true, it probably is. Always check that anyone offering or advising on an investment scheme is authorised by the FSA. You can do this by checking on our register. The link is below.

What's the difference between savings and investments?
Our booklet 'Just the facts about saving and investing', linked to below, sets out the differences in full. We strongly recommend that you read this if you are considering saving or investing.

The main differences are these:

• Savings tend to be for short-term goals, or for when you may need to access the money quickly. You put your money into an account where it earns interest, without the risk of losing any of it (short of a bank, credit union or building society collapse). Savings are referred to as low risk.
• Investments, however, are for the longer term. Investments generally involve schemes or funds based on the stock market. You take a risk with your money by investing in assets that can go up or down in value.

Interest rates
You earn interest on savings. Generally, the higher the interest rate offered the better. But be wary of very high interest rates as there may be some catches. For example, some savings accounts offer high interest for an introductory period only. You also need to consider whether the interest is:

• fixed, or variable
• monthly or yearly