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Both ways in which people put away surplus money and earn a return on it. There's risk taken that they may lose money ( all furniture products ). The higher the risk, the greater the return. If someone was to earn a higher rate of interest on their savings / investment, they need to take a higher risk. Saving products are less risky than investment products. Many investors use a variety of different long- term savings + investment products when saving for a large item or retirement. The combination chosen by an investor is known as their portfolio. A portfolio might be made up of many different types of savings + investments The capital sum deposit isnt at risk - a saver won't get back less money than they paid in ( £85, 000 FSCS ). Because the capital sum isn't at risk, savings accounts don't pay high interest rates. Long-term savings accounts usually pay slightly higher interest rates then short-term ones but Investments are high risk because their value depends asset performance and the financial markets. The higher risk of an investment product means the returns can be higher then on savings products but the value of investments can fall as well as rise. This means that its possible for a fund to earn a low or no return and for someone to lose some or all of the capital. People who invest in funds can ...
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