Saving and investing are both ways to manage your money, but they are different in their purpose and the way they generate returns.
Saving typically involves putting money into a low-risk account, such as a savings account or a certificate of deposit (CD), with a bank or other financial institution. Saving is usually done to achieve short-term goals, such as building an emergency fund, making a down payment on a house or car, or saving for a vacation. Saving generally earns a lower rate of return than investing, but it also involves less risk.
Investing involves using your money to purchase assets, such as stocks, bonds, or real estate, with the expectation of generating a higher return over the long term. Investing is typically done to achieve long-term goals, such as saving for retirement or funding a child's college education. Investing generally involves more risk than saving, but it also has the potential for higher returns.
While saving and investing are different, they can complement each other in a balanced financial plan. Saving is important for short-term security and emergencies, while investing is important for long-term growth and wealth-building. The decision to save or invest depends on your financial goals, risk tolerance, and time horizon.