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It’s important to know the differences, and when it’s best to save vs. when it’s best to invest.The biggest difference between saving and investing is the level of risk taken. Saving typically results in earning a lower return but with virtually no risk of losing your money. In contrast, investing offers the opportunity to earn a much higher return, but you take on the risk of loss.Here are the key differences between investing and saving — and why you need both strategies to build long-term wealth.Learn more: How to build a financial plan for you and your familyWhile they share a few similarities, saving and investing are different in most respects. And that starts with the type of assets used for each.When you think of saving, think of bank products such as savings accounts, money markets and certificates of deposit (CDs). And when you think of investing, think of stocks, ETFs, bonds and mutual funds.The table below summarizes some of the key differences between saving and investing:SavingInvestingAccount typeBankBrokerageReturnRelatively lowPotentially highRiskVirtually none on FDIC-insured accounts, other than inflation risk (also known as purchasing power risk)Varies by investment, but there is always the possibility of losing some or all of your investment capitalTypical productsSavings accounts, CDs, money-market accountsStocks, bonds, mutual funds and ETFsTime horizonShort: You may want access to this money in the next week, month or yearLong: You can let this money sit for five years or more (though some investors like short-term trading)DifficultyRelatively easySomewhat complexProtection against inflationOnly a littlePotentially a lot over the long termExpensive?No, but will owe taxes on interestDepends on fund expense ratios; will owe taxes on realized gains in taxable accountsLiquidityHigh, unless CDsHigh, though you may not get the exact amount you put into the investment depending on when you cash inSaving and investing have many different features, but they do share one common goal: they’re both strategies that help you accumulate money. Plus, both use specialized accounts with a financial institution.For savers, that means opening an account at a bank or credit union.For investors, that means opening an account with an independent broker, though now many banks have a brokerage arm, too. Popular online investment brokers include Charles Schwab and Fidelity.Terms and Privacy PolicyPrivacy & Cookie SettingsMore InfoS&P 5006,909.51 +47.62 (+0.69%)Dow 3049,625.97 +230.81 (+0.47%)Nasdaq22,886.07 +203.34 (+0.90%)Russell 20002,663.78 -1.31 (-0.05%)VIX19.09 -1.14 (-5.64%)Gold5,080.90 +83.50 (+1.67%)Trending tickersBTC-USD Bitcoin USD 67,979.62 +133.48 (+0.20%)ETH-USD Ethereum USD 1,975.57 +12.43 (+0.63%)XRP-USD XRP USD 1.42 -0.01 (-0.57%)SOL-USD Solana USD 85.21 +0.98 (+1.17%)BTC-CAD Bitcoin CAD 93,047.09 +182.70 (+0.20%)PortfolioSign in to access your portfolioSign inTop gainersRNG RingCentral, Inc. 39.50 +10.11 (+34.40%)LGN Legence Corp. 55.24 +7.96 (+16.84%)TLX Telix Pharmaceuticals Limited 7.69 +0.98 (+14.61%)SYRE Spyre Therapeutics, Inc. 43.21 +5.40 (+14.28%)FSM Fortuna Mining Corp. 12.27 +1.37 (+12.57%)Top losersFROG JFrog Ltd. 37.75 -12.54 (-24.94%)DNOW DNOW Inc. 13.23 -3.13 (-19.13%)CC The Chemours Company 17.04 -3.37 (-16.51%)AKAM Akamai Technologies, Inc. 94.17 -15.42 (-14.07%)RGC Regencell Bioscience Holdings Limited 29.17 -4.29 (-12.82%)Most activeNVDA NVIDIA Corporation 189.82 +1.92 (+1.02%)OPEN Opendoor Technologies Inc. 5.0000 +0.3500 (+7.53%)ONDS Ondas Inc. 10.03 -1.36 (-11.94%)INTC Intel Corporation 44.11 -0.51 (-1.14%)PLUG Plug Power Inc. 1.8700 -0.0400 (-2.09%)Top economic eventsEarnings eventsMy earnings eventsEarnings events