Cash is king, and everyone knows that being wealthy means having a lot of it. But how do you go about saving money and earning interest so that you have even more later? The answer is investing: Putting your money into something with the potential to grow, rather than just keeping it somewhere safe. Investing your savings can be a scary prospect for most people. After all, anyone who has ever lost their life savings from risky investments or a get-rich-quick scheme will know the stress it can cause. Luckily, not all investments are risky – some are safe and suitable for almost everyone with some cash they want to keep safe and earn reliable interest on. Keep reading to find out which ones are best for you.
What is the best way to invest your savings?
The best way is to invest your savings in a diversified portfolio of low-cost index funds. It’s the most reliable way to grow your savings over the long term, and it’s a strategy that has been proven to work for millions of people. A diversified portfolio is a mix of different investments. In most cases, a good mix includes between 30 and 100 different types of investment. Different types of investment have different levels of risk, so you’ll want a mix that has both low-risk and high-risk investments. A low-cost index fund is a type of low-risk investment. It’s a type of mutual fund that buys lots of different stocks and other investments. By investing in a low-cost index fund, you own a piece of all of those different investments.
Why you should invest your savings
If you’d like to kickstart your savings, choose an investment option that offers monthly interest, or even better, a lump sum payment after a certain period of time. This is a great way to start building a nest egg, especially if you’re a first-time saver. You’ll benefit from a sizeable return on your investment that you can use to help with a mortgage deposit, a car, or an education. If you’re looking for a long-term solution, you could consider investing in a stocks and shares ISA (or stocks and shares JISA if you’re under 18). You can put in a lump sum, or make monthly contributions. The interest you earn will depend on the type of shares you choose, but you can expect to make between 6-10% per year on average.
Safe investments for beginners
If you’re new to investing, you’ll want to choose an investment with low risk. This way, you minimize the risk of losing your savings, but still have a chance of getting a decent return. Here are some of the safest options: – Fixed interest investments – These are low-risk investments that offer a fixed interest rate. They’re relatively safe as they’re backed by government bonds. – Money markets – These are short-term investments that pay a low interest rate, but are very safe. – Cash ISAs – Cash ISAs are savings accounts that pay a low rate of interest, but are very safe. You can get a better interest rate by taking out a stocks and shares ISA, but this is riskier.
Risky investments for experts only
If you’re more of an expert investor and would prefer to take a bit more of a risk, here are some more risky options: – Shares – Shares are higher risk investments, but they have the potential to produce much higher returns than cash. – Investment trusts – Investment trusts are higher risk investments, but they have the potential to produce much higher returns than cash. – Investment real estate – Real estate is a high risk investment, but it has the potential to produce much higher returns than cash. – Hedge funds – Hedge funds are extremely high risk investments and aren’t suitable for most people. They are managed funds that invest in a wide range of different assets.
Investment platform recommendations
There are plenty of investment platforms on the market offering a variety of different investment options. Here are some of our favorites: – Nutmeg: Nutmeg is a great option for beginners who want to save regularly. The company offers savings plans at different frequency levels, as well as a stocks and shares investment plan. – Wealthify: Wealthify is an excellent platform for more advanced investors. It offers a wide range of investment plans, including stocks and shares. – Weave: Weave is a new company that offers fixed and flexible interest rates on investments. It has a wide range of investment options, including stocks and shares. – Zopa: Zopa is an online marketplace where people can borrow money from other investors. It’s a great option for those who want to diversify their investment portfolio and earn interest on their savings.
There are plenty of ways to invest your savings, but not all of them are suitable for everyone. It’s important to consider your risk appetite, how much you have to invest, and how much you’re looking to earn from your investments. The best way to keep your savings safe and earn interest is to choose a low-risk investment with a decent interest rate.
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