Final answer:
Savings accounts typically have lower interest rates, are FDIC-insured up to $250,000, offering safety and high liquidity without the risk of losing the principal amount.
Step-by-step explanation:
Savings accounts are different from investments in several ways. One key difference is that they typically have lower interest rates compared to investments. This reflects their nature as being low risk, which also means they offer a lower rate of return, but they do provide high liquidity. In addition to this, a distinguishing feature of savings accounts is that they are protected by the Federal Deposit Insurance Corporation (FDIC), which insures deposits up to $250,000 per depositor, per insured bank, for each account ownership category in the event of a bank failure.
It's also important to note that unlike many investments, savings accounts generally do not carry a risk of losing the principal amount. While there are various ways to save at a bank, such as with a certificate of deposit (CD), which usually provides a higher interest rate for entrusting the bank with your money for a fixed period, early withdrawal from a CD can incur a substantial penalty.