Question

What is the main difference between investing and saving? Select the best answer from the choices provided. Investing has a better annual rate of return than saving. Investing has the risk of losing principal, whereas saving does not. Invested money earns interest, whereas saved money does not. Invested money is insured by the FDIC, whereas saved money is not.

Answer 1

The main difference between investing and saving is when your investing, your looking for a way to get money or investing in a loan. Saving on the other hand, is where you save up your money to get to the amount you need.

Answer 2

With savings, you are placing your cash into an account where it's going to accrue interest but its trajectory is mostly a small line upward. It is safe and you may no longer lose it, as it's far insured through the FDIC.

With investing, you purchase pieces of agencies or bonds or commodities and the cost of these pieces rises and falls as the value of the agencies, bonds, or commodities rises and falls. So, instead of the small line upward as visible with savings, it looks greater like a roller coaster. That could mean you gain lots of it may suggest you lost lots.