Saving is setting aside out of what you have for an emergency or future use, and saving could be money, properties like materials things.
Saving could be putting money in the bank and to others buying of stocks or to pension plan.
But it simply means consuming less in the present in order to consume more in the future.

types of saving

  1. Traditional or Regular Savings Account
    Good for: People who need to save money for the short or long term and aren’t as concerned about getting the best interest rate, expressed as the annual percentage yield (APY).

Traditional savings accounts are what you may immediately think of when you consider where to save. These are the savings accounts you typically find at traditional banks or credit unions.



Regular or basic savings accounts generally allow you to earn interest on your money, although they usually pay lower rates than other savings products. Many banks and credit unions allow you to open a regular savings account with a low minimum deposit.

Traditional savings accounts typically allow you to make up to six withdrawals per month (not including ATM withdrawals or in-person withdrawals at a branch) before incurring a penalty. Recent relaxation of the Regulation D restrictions remove the six-withdrawal limit, although your bank or credit union still has the right to charge you a fee for exceeding the monthly limit.

Banks and credit unions may allow you to manage your account online, via mobile banking, by phone or at a branch.
If your bank is insured by the Federal Deposit Insurance Corporation (FDIC), then your deposits are insured for up to $250,000 per depositor, per account ownership category, in the event of a bank failure. The National Credit Union Administration (NCUA) provides similar insurance for federally chartered and most state-chartered credit unions.

It’s usually easy to open a regular savings account at a branch, and some banks allow you to do so online.
You can earn interest on your savings to grow your money.
You can visit a branch if you need help or want to deposit cash.
The interest rates are usually on the low side, compared to other savings options.
Monthly maintenance fees may cancel out interest earnings.
Additional fees may apply for excess withdrawals.

  1. High-Yield Savings Account
    Good for: People who want to earn a more competitive rate on savings while minimizing fees.
    High-yield savings accounts are savings accounts that offer a higher APY, compared to regular savings accounts.

Online banks often offer high-yield savings accounts to attract savers who want to earn a better interest rate than what is found at brick-and-mortar banks and credit unions. This type of savings account may be appealing if you’re comfortable managing your account through online or mobile banking versus visiting a branch.

  1. Money Market Accounts
    Good for: People who want to earn interest on savings while having more options for accessing their money.

Money market accounts (MMAs) combine features of a regular savings account with features of a checking account. You can find these accounts at both brick-and-mortar banks and online banks.

These accounts, which may also be called money market savings accounts or MMSAs, allow you to earn interest on your savings. Rates are typically better than regular savings accounts. You may also be able to write checks from your account or access funds with an ATM or debit card.
Similar to regular or high-yield savings accounts, banks can impose a fee if you make more than six withdrawals per month, even though the relaxation of the federal Regulation D restrictions now allow for readier access to your funds. Going over the monthly limit could trigger a fee or result in the bank’s closing your account if it happens frequently.

  1. Certificate of Deposit Account
    Good for: People who want to earn competitive rates and won’t need to access their savings right away.
    Certificates of deposit (CDs) are time deposits, meaning you agree to leave your money in the account for a set period. During that time, your money earns interest and, when the CD matures, you can withdraw your savings or roll it into a new CD.
    You can find CDs at traditional banks and online banks. Between the two, online banks tend to offer better interest rates. CD terms typically range from as short as 30 days or as long as 60 months, with longer terms usually boasting higher rates—although not always, especially in a lower interest rate environment.
    CDs are best for money you know you won’t need immediately, since banks can charge an early withdrawal penalty if you withdraw your savings before the maturity date. Creating a CD ladder of multiple CDs with varying maturity dates can offer a work-around for this issue.

  2. Cash Management Account
    Good for: People who want to keep cash available to invest in their brokerage or retirement account.
    Cash management accounts aren’t savings accounts per se. Instead, these accounts let you hold cash you may plan to invest in a taxable brokerage account or a retirement account.


important of saving

  1. Once in a While Expenses: Example: buying a computer, bike or a car, home improvement, going on summer tours, doing some random course, buying air conditioner etc.

  2. Savings for Deferred Goals: Example: buying a home, higher education, child marriage etc.

  3. Emergency requirements: Example: hospitalization, death, theft, natural calamities etc.

  4. Lifetime Goals: Example: retirement, creating an estate


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 a 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.

Types of investments

  1. Bonds
    When you buy a bond, you’re essentially lending money to an entity. Generally, this is a business or a government entity. Companies issue corporate bonds, whereas local governments issue municipal bonds. The U.S. Treasury issues Treasury bonds, notes and bills, all of which are debt instruments that investors buy.
    While the money is being lent, the lender gets interest payments. After the bond matures — that is, you’ve held it for the contractually determined amount of time — you get your principal back.
    The rate of return for bonds is typically much lower than it is for stocks, but bonds also tend to be lower risk. There is some risk involved, of course. The company you buy a bond from could fold, or the government could default. Treasury bonds, notes and bills, however, are considered a very safe investments.

  2. Mutual Funds

A mutual fund is a pool of many investors’ money that is invested broadly in a number of companies. Mutual funds can be actively managed or passively managed. An actively managed fund has a fund manager who picks securities in which to put investors’ money. Fund managers often try to beat a designated market index by choosing investments that will outperform such an index. A passively managed fund, also known as an index fund, simply tracks a major stock market index like the Dow Jones Industrial Average or the S&P 500. Mutual funds can invest in a broad array of securities: equities, bonds, commodities, currencies and derivatives.

  1. Mutual funds carry many of the same risks as stocks and bonds, depending on what they are invested in. The risk is often lesser, though, because the investments are inherently diversified.

  2. Exchange-Traded Funds
    Exchange-traded funds (ETFs) are similar to mutual funds in that they are a collection of investments that tracks a market index. Unlike mutual funds, which are purchased through a fund company, shares of ETFs are bought and sold on the stock markets. Their price fluctuates throughout the trading day, whereas mutual funds’ value is simply the net asset value of your investments, which is calculated at the end of each trading session.
    ETFs are often recommended to new investors because they’re more diversified than individual stocks. You can further minimize risk by choosing an ETF that tracks a broad index.

  3. Certificates of Deposit
    A certificate of deposit (CD) is a very low-risk investment. You give a bank a certain amount of money for a predetermined amount of time. When that time period is over, you get your principal back, plus a predetermined amount of interest. The longer the loan period, the higher your interest rate.

There are no major risks to CDs. They are FDIC-insured up to $250,000, which would cover your money even if your bank were to collapse. That said, you have to make sure you won’t need the money during the term of the CD, as there are major penalties for early withdrawals.



Difference’s: Saving and Investment

  1. Risk Saving account are low risk funds. In other words, it is terms as less risky capital investment option. Risk of capital investment differs from medium risk to high risk based on financial securities.

2 Availability Withdrawal of your capital in savings account is quick and easy. It is useful when you are in need of emergency funds. Withdrawal of capital investment depends on the maturity date of your security holding. Early withdrawal may lead to penalties as well.

  1. Return Returns are low in savings account since risk of investment is also low. Return on capital investment are higher than savings account. As risk of investing is also greater than saving accounts.
    Inflation Interest received are normally below the inflation rate. Which means you are losing money in long

Question 3

Base on the explanation and the importance of the two one need to involve in them because they serve different purposes.

I invested in my business and I also save money anytime I need money, so both of them are good.

Involved in the two.