Have you ever wondered if you should invest your savings or keep them in the bank?
When it comes to savings and investments there are a variety of options to choose from and navigating this sea of information can seem daunting.
Whether you are aiming to grow your wealth, enjoy a worry-free retirement, or simply ensure financial stability, you’ll want to feel confident in your choices.
Here we provide some practical guidance to help you make informed decisions that align with your circumstances and financial goals.
How much should I keep for the short-term?
It’s generally advised to maintain an emergency fund equal to three to six months’ living expenses. This provides a financial cushion for unexpected costs or income loss.
Additionally, consider setting aside funds for future goals like a dream holiday, a new home deposit, a wedding, or Christmas expenses. For these short-term goals, keep your funds easily accessible in a savings account.
The team at Rosart focus on helping you plan for both the expected and unexpected with care and personalised advice to enable you to make well-informed financial decisions.
What return can I expect?
Traditional savings accounts offer interest, providing a secure, low-risk way to grow your money. For higher returns, consider options like high-yield savings accounts or fixed-term deposits.
For those seeking greater growth, investing in shares, bonds, or collective funds may be more suitable. Each option carries its own level of risk and potential reward.
At Rosart, we help you navigate these choices, ensuring your savings align with your financial goals.
Should I invest?
Before deciding to invest your savings, consider your goals.
Ask yourself what risks you can afford and are comfortable with, and how long you can commit your funds.
Investing often provides higher returns than traditional savings accounts, but it comes with greater risks.
Diversifying across various assets like shares, bonds, and property can help manage risk and offer growth opportunities.
Which investment is best?
Choosing the best investment for your savings depends on your financial objectives, risk tolerance, and required duration of investment. There is no single answer to this question as it is best to assess on a personal level to ensure the investment is the right for the individual.
Here are some popular investment options typically explored by those seeking to invest their savings:
- Shares: offer high growth potential but come with associated risks.
- Bonds: provides lower returns compared to shares but typically with reduced risk.
- Collective investment funds: diversified portfolios managed by professionals.
- Property: can offer steady income and potential capital appreciation but requires substantial initial investment and ongoing management.
Is your money protected?
Savings accounts offered by banks and building societies provide a safe place to store your money. In the United Kingdom, these accounts are insured by the Financial Services Compensation Scheme (FSCS) for deposits up to £85,000 per depositor, per authorised institution. This protection makes savings accounts a secure option for preserving your capital.
Anything over this amount in a single bank account is not covered and potentially at greater risk.
What is the best way to invest my savings?
Investing your savings requires careful consideration of your financial aims, tolerance to risk, and the need for readily available funds. While investing can offer higher returns, it is necessary to maintain a balance between investments and savings.
Determining the right amount to keep in savings, selecting appropriate investment options, and understanding the protections offered by savings accounts are key components of a sound financial future.
An independent financial planner can guide you through your options and offer impartial advice to help you achieve your financial goals.
At Rosart, we’re here to help you navigate these decisions with confidence and care.