Comparing saving and investing

The key differences between saving and investing are in the level of risk and potential return. Saving is generally considered lower risk and may suit short-term goals, while investing typically involves more risk but can offer potentially greater long term growth.

Savings accounts earn steady interest and can generally be accessed quickly. Investment returns are not guaranteed. They can fluctuate with market conditions and may take time to sell, meaning you don’t have access to your funds as readily.

Understanding these differences can help you balance saving and investing to meet your financial goals.

Risks to consider

Every financial decision carries some risk. If you choose saving, remember that inflation can reduce your purchasing power over time. There’s also a chance that interest rates will fluctuate, affecting how much interest your savings can earn.

For investing, market volatility can cause investments to lose value. This means you may not get back what you originally invested. The funds from some investments can also take longer to access than savings accounts.

A combination of both savings and investments can help manage these risks.

How saving works

Saving means putting money into a account, where it earns interest and is easy to access. It’s a safe way to store money for goals or emergencies.

Features of saving

  • Your money stays safe, with little to no risk and access to funds quickly when needed.
  • Savings accounts earn interest, though returns are typically lower than investments. They’re potentially suited for financial goals like a home deposit or travel.

Saving options

  • Earn interest while keeping access to your funds with a high-interest savings account.
  • A term deposit allows you to lock in money for a fixed period at a guaranteed rate.
  • You can bucket your money, a technique where you set up multiple bank accounts and use them for specific purposes like bills, health and entertainment.

Reasons to save

  • You may need money for an emergency fund or when saving for a major purchase in the next few years.
  • You may prefer a guaranteed return in the form of interest.

How investing works

Investing involves buying assets that can grow in value over time. Examples include shares, exchange-traded funds (ETFs) or property. Unlike saving, investing carries risk but may generate higher long-term returns.

Features of investing

  • Investments can increase in value, offering higher potential returns than savings.
  • There’s always a risk of losing money, especially in the short term, so investments might be better suited to long-term financial growth.
  • Returns come from capital appreciation (value increasing over time) and income, such as dividends or rental income.

Investment options

  • Shares and ETFs – buying ownership in companies or diversified funds.
  • Managed funds and superannuation – professionally managed portfolios for long-term growth.
  • Property (investing in real estate), or in government-backed securities.

Reasons to invest

  • Investing may be a suitable option if you have long-term financial goals (more than five years) and you already have an emergency fund saved.
  • Investing may also be suited to people who are comfortable taking some risk in exchange for higher potential returns.

Whether you're looking to save for security or invest in growth, NAB offers a range of options to help you manage your money.

Compare savings accounts

Our savings account comparison table will help you choose an account so you can meet your savings goals.

  NAB iSaver NAB Reward Saver NAB Term Deposit
About this account
NAB iSaver
An online savings account linked directly to your NAB transaction account.
NAB Reward Saver
Grow your savings faster with bonus interest for regular deposits and no withdrawals.
NAB Term Deposit
Enjoy a competitive interest rate with a locked, fixed term savings account.
Interest rate
NAB iSaver

Total introductory interest rate for 4 months 4.40% p.a.

1.25% p.a. standard variable rate + 3.15% p.a. fixed bonus margin for 4 months. After 4 months, the standard variable rate of 1.25% p.a. will apply. If you have not held a NAB iSaver in the last 12 months
NAB Reward Saver

Earn up to 4.10% p.a.

0.10% p.a. variable base rate + 4.00% p.a. variable bonus rate for each month that you make at least one deposit on or before the second last banking day and no withdrawals.
NAB Term Deposit
Interest paid depends on the length of the fixed term and the amount deposited.
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Important information

Any advice has been prepared without considering your objectives, financial situation or needs. Before acting on any advice, you should consider whether it is appropriate for your circumstances and view the Personal Transaction and Savings Accounts Terms and Conditions or NAB Term Deposit Terms and Conditions. NAB recommends that you seek independent legal, financial, and taxation advice before acting on any advice. Target Market Determinations for NAB products are available at nab.com.au/TMD. NAB products issued by NAB. 

See our personal banking fees and charges and indicator rates for deposit products.