Most people’s knowledge of savings is putting a little aside into the bank. This is a safe place to save your money in the short term. However, banks tend to pay little or no interest. If you are saving over the medium to long term, you should consider funds specifically designed for longer term savings. When we talk about investments, we typically mean a once off lump sum you may want to invest. This would typically be a higher amount than your regular savings. Acknowledging that you have a saving or investing need, is the first step. The next step is to decide how much you want to save or invest and then how you want your money invested.
Long-term savings plans
In today’s low-interest-rate environment, deposit rates are extremely low. However, there are options that can get your money working harder for you.
One option is to start a long-term savings plan. Long-term saving plans typically involve an element of risk, over the long run they are more likely to generate a higher return than a simple savings account. They accumulate a capital sum over the longer term from regular monthly savings. We recommended a minimum term for plans of five years, and your savings are typically invested in diversified investment funds.
these savings accounts are for a set period of time at a fixed rate of interest. The interest rates offered are typically higher than the interest rates offered by regular savings accounts, however, you cannot access your money during the fixed term. Deposit accounts are low risk, but over the longer term, they tend to produce low returns.