During the pandemic, investment trends have become popular. One of the driving factors is the rapid increase in the price of gold and cryptocurrencies which has caused people to begin to realize the benefits of investing. But behind that, do you know about the difference between saving and investing?

By definition, saving is an activity by setting aside funds in preparation for short-term needs or emergency conditions. While investing in developing the money you have to get a larger amount of profit. The most striking difference between saving and investing lies in the risk and potential return obtained. Savings can be taken at any time and have a lower risk, the return is certain following the amount saved, while investment has a long-term and higher risk because the return is uncertain which can be higher or lower than the initial investment.

Even so, saving is not without risk, we may experience losses in saving when high inflation occurs. When inflation occurs the value of the currency will decrease and as a result, we experience losses because the value of our savings at that time was lower than the value when we started saving even though the amount remained the same. In investing, this can be overcome by buying investment products whose returns are greater than or equal to inflation so that we will avoid losses due to high inflation.

In terms of the results obtained, the investment is also profitable in the long run because the money saved is not fixed and instead grows into more. Within one year the money invested can increase one to two times compared to saving in a bank which in one year only earns about 4-5 percent interest.

From the risks and profit opportunities that exist, investing is not too scary and difficult to do. Patience and thoroughness are the keys to wanting to find out the intended investment product in the form of stocks, gold, or cryptocurrency. Investment becomes more secure with the existence of individual investment insurance product services from BNI Life.

Sources: Bisnis.com, Kompas.com