Hey[ @benjaminjones211 Great question, it’s important for you to know your financial goals are when you invest or save your money, and it’s a common question for first-time investors. If someone doesn’t like the idea of the value of their investments going up or down then it can make sense to take less risk by opting for a savings account. However, the low interest rates offered on savings accounts often mean that your money will lose value over time. The other option is investments - while the value of invested money can go down, over the long term it usually goes up. For people with a long term goal in mind, historically they will always have been much better off investing their money in diversified investment portfolios rather than low interest accounts.
Our Cautious portfolios are built with a higher proportion of Government Bonds and Green Bonds, which are less risky than ETFs . For people that may need their money in the short-term, it makes sense to invest in a cautious portfolio. Using a savings account is another way to reduce the risk that the value of your money may go down. There are a lot of different offers in the market that can be a great way of keeping your money safe if you need rapid access to it!On MoneySavingExpert they show savings accounts that range from 1.16% (easy access) to 1.4% (fixed). So if you put £1,000 into a savings account with a rate of 1.14% for one year, you’d have £1,011.40 (+£11.40). The downside to keeping your money in a savings account, is that inflation (often around 2%) can mean that in real terms your money is losing value. If you have any other questions let me know - happy to help!