Savings, Investments, or a combination of both? Choosing which account to put your money into can be a difficult decision. Savings accounts offer higher interest rates, but investments offer a chance for more growth. Some people decide to use both in order to get the best of both worlds. Let’s take a look at the best of saving and investing.
The best of saving and investing
Build up your wealth step by step. This works as easily as with the best savings account but gives you the return opportunities of securities investments. Start with an initial deposit of at least 100 francs – after that you can continue to invest from as little as 50 francs
Equities, funds, ETF
The investment world can seem quite complicated: Terms such as funds, ETF, shares, and bonds contribute to this. What is behind it?
- Shares: Whoever invests in shares automatically participates in a stock corporation, i.e. in a company. Shares are traded on the stock exchange. Their current value is shown on the stock exchange via the stock market price. This value reflects the demand for the share and can fluctuate greatly.
- Bonds: Whoever buys a bond lends money to a company or a state, which is repaid after a certain period of time. In return, the investor receives a fixed interest rate. At the end of the term, the borrowed amount is repaid along with the last interest. Bonds are generally regarded as a stable and safe investment, but they usually also yield less than riskier investments.
- Investment fund: A fund is a kind of pot that different investors pay into. In return, you receive a proportionate share of the entire fund. The money is then used to buy stocks, bonds, and other investments. In this way, the investment becomes more diversified. Depending on the focus of the fund, a smaller or larger risk can be taken.
- ETF: Exchange Traded Funds (ETF), as the name suggests, are funds that are traded on the stock exchange. They therefore also contain various systems. ETFs usually reflect what is known as an index. Indices are a collection of stocks that represent, for example, a market. Well-known indices are, for example, the SMI (Swiss Market Index) or the Dow Jones. The price development of ETFs reflects the development of the underlying index: if, for example, the SMI rises, the ETF on the SMI also rises accordingly.
Read also: How To Make Money Work For You
Conclusion: Diversify your Savings and Investments
While you keep the best savings account in your most trusted bank, it is also important to have a diversified portfolio with different asset classes. The goal of diversifying your portfolio is to lower the risk and volatility of the investment. You can achieve this by investing in stocks, bonds, mutual funds, ETFs, and more.