Basics of Saving and Investing
When saving, you use financial instruments to safeguard and accumulate funds for short term spending goals. Saving instruments typically earn interest, have minimal or no risk to principal, emphasize safety and liquidity, but are subject to inflation risk.
When investing, you use financial instruments to grow your money for long term goals such as retirement. Investing products allow you to gain a profit through interest, dividends, and/or increase in value, but your principal is at risk of loss. Each type of investment carries a certain level of risk. Understand how the investment works and if it's right for your age, investment objectives, and risk tolerance.
Before you even think about investing, it is recommended to maintain a "rainy day fund," an emergency fund with money that is liquid (easily accessible) and the principal is not at risk. Read more about getting started on the path to saving and investing.