Siddhi Sharma

Siddhi Sharma

Associate Money Coach, LXME NISM Certified

savings vs investing

When it comes to money women are very disciplined in saving and budgeting. They can manage the expenses even in the tightest budget. They always think about the future like no one else can as they are proactive in all situations, so they always set aside some part of their budget for future or emergencies.

However, can just saving money help you fulfill all of your goals? No, right! This is the gap we need to bridge and understand the difference between savings and investment.

There’s a preconceived notion that savings and investments are the same, while it’s not the case rather savings is the first step toward investment. When you want to grow your money and create wealth for yourself in order to fulfill your goals and dreams you need to invest and make your money work for you.

Now let’s understand the difference between savings and investment in detail.

Savings: Base of your Investments

Setting money away to be used in the future is what savings is all about and it is the start point of your money journey. Savings offer you flexibility & liquidity. With that in mind, women save money for specific reasons for emergencies but they don’t realise that it doesn’t grow their money.

Savings are secure and easily available, such as how women have been saving money over decades between their sarees, in their cupboards, maybe even in the big steel grocery boxes in their kitchen, or probably in savings bank accounts, but unfortunately, there you get either no returns or very minimal returns because the money does not grow sufficiently to fulfill your future goals or even beat inflation.

Now you might be thinking what is inflation, right? So, inflation is nothing but a rise in prices of goods and services in simple words “Mehengai”

For example: In 2014 1 litre milk packet was Rs.35 then after 5 years in 2019 the price of 1 litre milk packet increased to Rs.45 and now in 2024 the 1 litre milk packet costs Rs.55.

Grow your money by investing

Investing means putting money into different kinds of investment options, such as equity, debt, gold, and fixed-income instruments. Basically, it’s all about growing your money and creating wealth.

Let us take a look at The difference between savings and investment concisely:

MeaningPutting aside some part of your income for future spendingCommitting money to an investment instrument with the expectation of profit or income – and to beat inflation
PurposeTo keep money safe and accessibleTo grow money over time
RiskLow Comparatively high and also depends on which investment options you are investing in.
GoalTo have ready access to cash/money for emergencies.Capital appreciation/money growth and meeting financial goals.
ReturnsNegligiblePotentially higher, depends on  which investment option you are investing.
GrowthLimited. Not suitable for long term wealth creationReturns on investments can grow over time, which can help you create wealth over long term
Ability beat inflationIt cannot beat inflationCan beat inflation over long term

Let’s have a look at an example that can help you understand the difference better.  

This graph here depicts Savings vs Investment, what happens when you put Rs.10,000 in your home lockers/purse, savings bank account Vs. when you invest it in an equity mutual fund over 5 years. Note: The inflation applicable to us is around 8% to 10%.

As you can see in the above graph if you save Rs.10,000 in the home locker/purse then after 5 years it would be Rs.10,000 only, if you save that money in a savings bank account it could give you on an average of 2.75% p.a. interest and after 5 years it could increase to Rs.11,542 but for you to beat inflation, you may require 14000-16000 after 5 years, therefore, just saving won’t grow your money.

However, if you invest that Rs.10,000 in equity mutual funds then after 5 years your money could grow to Rs.21,003 which is double of 10,000 and also beating inflation. (The rate of return assumed for equity mutual funds is 15% p.a.)

This is why we emphasize that after securing your savings, you should take the next step and invest, enabling you to achieve your goals faster and build substantial wealth for your future.

“Don’t work for money, make money work for you”

At LXME, we offer well-researched, diversified, and expert-curated goal and time-based mutual fund portfolios for women to start their money journey. Check out the LXMEinvestment platform for women and start today and leverage the power of compounding.


1. Which is better, savings or investment?

Savings is the first step towards investing, in order to fulfill your goals and grow your money so in order to give growth to your money you need to move a step further toward Investing which can bring you closer to your goals.

2. Should savings be more than investment?

One should start saving and investing after assessing their goals, time horizon, and risk appetite and basis that they can decide how much they want to save & invest. However, the more you invest more you can grow your money.

3. What is more risky saving or investing?

Saving offers safety and stability, and investing offers the potential for higher returns but comes with comparatively higher risk. 

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