Saving some of your income is a good habit to get into.
However putting all your money in a bank account may be not a safe strategy over the long run.
Most savings accounts only oﬀer interest of 1% to 3% per year so your balance will grow slowly if you rely on interest from the bank. If you put all your money in a savings account, it will take you longer to save up for your financial goals.
Provided you don’t need the cash soon, your money can work harder for you if you invest it. Investing has the potential to earn higher returns than a saving account. It’s a great way to put your money to work.
For example, putting $25,000 in a savings account 7 years ago would be worth about $31,167 today compared to over $45,000 in shares.
Source: Vanguard. Overall returns for asset classes for a 7 year period from 01/07/2010 to 30/06/2017. Returns taken as constant for all years and amounts are not adjusted for inflation.
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