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Save, invest or both?

Let's find a mix that works for you.

Get in before 05 April

It’s tax year end on 05 April, so here’s a heads-up.

If you don’t use this year’s 2024/25 £20,000 ISA allowance before then, you’ll have to wave goodbye to it. But there’s still time to open a new ISA or to top up your existing one to maximise your tax efficiency for this year.

Your allowance then resets on 06 April with another £20,000 ISA allowance.

More about ISAs

Tax treatment depends on individual circumstances and could change in the future.

Our ISAs

How saving and investing compare

Saving basics

Savings accounts usually offer lower returns, but you’ll get back everything you put in, plus a bit extra in interest. Generally, they are secure and don’t suffer from large fluctuations in what you could get back.

Benefits of saving

  • Low risk.
  • No upfront costs. 
  • Suitable for short-term goals, like a holiday or larger planned purchase.
  • Peace of mind of knowing what you will get back.

Things to consider about saving

  • Early withdrawal fees could apply to some fixed-term accounts.
  • In return for flexibility, easy-access accounts usually give lower interest.
  • Can you afford to lock your money in? A fixed-rate account could give better returns.
  • If your interest rate is variable, it may increase or decrease in line with the UK Base Rate.
Saving options

Investment basics

Investing could generate better returns, but can also be riskier. The longer you leave your money in the better, making investing best suited to longer-term financial goals.

Benefits of investing

  • Potential to earn higher returns.
  • Suitable for medium to long-term investments – five years or longer.
  • Could help you to achieve longer-term goals, such as saving for a home deposit.

Things to consider about investing

  • To allow for market fluctuation, aim to keep an investment for at least five years.
  • Keep some money aside for emergencies so you don’t need to cash in your investments early.
  • You might want to seek independent financial advice before you invest. Charges will apply.
  • Investments can carry higher risks, as the value of your investments can go down and as well as up. 
  • You might benefit from developing your investment knowledge.
  • Trade commission and other fees will apply.
Investment options

The value of investments and the income from them can fall as well as rise, and you may get back less than you invest. If you’re not sure about investing, you might like to seek financial advice. Just be aware that charges will apply.

Get used to putting some money aside

Start with the basics

Before you save or invest, work to pay off any high-interest debts. It doesn’t make sense to earn interest on savings if interest on loans, cards and overdrafts cancel out your hard work.

Build up a ‘rainy-day’ fund in an easy-access account. You’ll be glad of this to fall back on if you lose your job. You can use it if you need to fix the car, buy a new washing machine, or pay the bills for a few months.

Get into a savings habit

First, get yourself set-up for all the things you need to do. Then you can start saving or investing for all the things you want to do.

It could help to set up a regular payment to a savings or investment account. Do this on or around payday each month. That way the money is committed before you’re tempted to spend it.

A plan could help

As each payday comes around, make sure you know how much you can afford to save or invest. The 50:30:20 rule might come in handy here.

Of course, if you get an unexpected windfall at any point, that’s a chance to boost your savings or investments even more.

Still unsure?

Your needs are unique to you. Only you’ll know if it makes sense to save, invest, or to cover both bases.
This information could help.

Comparing past performance

Of course, what’s happened before isn’t a guarantee of what will happen in the future. But it’s interesting all the same to compare the 10-year journey of cash savings and investments.

Graph comparing investing vs. savings over 10 years: £1,000 invested in S&P World Index (2015) is worth £2,659 in 2025; in a typical savings account it would be worth £1,229 in 2025.

Sources

Savings – MoneyFacts, 12m fixed non ISA rates, January 2025.

Investments – S&P Dow Jones Indices, S&P World Index (GBP). Excludes fees and does not include any dividends or reinvestment.

These figures refer to the past and past performance is not a reliable indicator of future performance. See a data breakdown of the performance in the table here. See a data breakdown.

Help with the sums

Try the save and invest calculator in our app. It’s a great tool to see how your money could perform, depending on whether you save, invest or both.

  1. Log in and select Save & Invest.
  2. Select Save & Invest calculator.
  3. Select Try the calculator.

Get set up on our app

 

Mobile banking app

Join our 7 million app users.

  • Simple and secure login.
  • Stay up to date with notifications.
  • Chat to us online.

Mobile banking app

Join our 7 million app users.

  • Simple and secure login.
  • Stay up to date with notifications.
  • Chat to us online.

Download app

Let’s take a closer look

  • If you save at an interest rate that’s higher than inflation, this can help to protect the purchasing power of your money. Otherwise, inflation can certainly undermine the spending power of your money, as well as the interest or returns you earn through saving or investing.

    A guide to inflation

  • The government set limits on how much interest you can earn from your savings or investments before you need to pay tax. Check out the following guides to learn more.

    Tax on savings interest

    Your personal savings allowance

    ISA allowance explained

  • What and where you save or invest is up to you. Just make sure you weigh up any potential risks and costs, as well as potential gains.

    And, you don’t have to pay in large sums. At Halifax, you can start with as little as £1 in selected savings accounts, or £50 a month in Ready-Made Investments.

    Of course, as you gain knowledge and confidence, you might like to pick your own investments.

  • All investments present a level of risk – some more than others. But before you discount the idea of investing completely, it might help to consider your goal and how soon you want to achieve it.

    Short-term goals – less than five years

    It can take time for an investment to recover from a market downturn. Based on that alone, for short-term goals, a savings account might suit you best.

    If you can afford to lock your money away for a year or more, instead of an easy-access savings account, consider a fixed-rate savings account. By accepting less flexibility, you could maximise what you can earn in low-risk interest. Just be aware that fees could apply to early withdrawals.

    Medium-term goals – five to ten years

    Cash savings offer slow and steady growth, but if you can afford time as well as money, investing could give better returns over a longer period.

    Obviously, the aim is to cash in your investments when the price is strong, remembering to account for any account fees.

    There’s nothing to stop you splitting your money between savings and investments, helping you to manage both short and longer-term goals.

    Long-term goals – 10 years or longer

    The longer you leave your money in a savings account, it’s more likely to lose value. That’s unless you’re always earning interest at a higher rate than that of inflation.

    Even accounting for market ups and downs, investing might give a better return over a long term. But there is greater risk so you’ll need to be comfortable with that risk.

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Save and invest your way

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Browse ISAs

Financial planning

It's never too early, or too late, to start planning for the future you want

Start planning

Understanding investing

However long you've been investing, there's always something new to learn.

Learn about investing

Protecting your money

FSCS logo


The Financial Services Compensation Scheme (FSCS) protects up to £85,000 of the eligible money you hold with us.

More about the FSCS



Protecting your money

FSCS logo

The Financial Services Compensation Scheme (FSCS) protects up to £85,000 of the eligible money you hold with us.

More about the FSCS

Help and guidance

From savings calculators to setting up a standing order, we've got you covered.

Help and guidance

Help and guidance

From savings calculators to setting up a standing order, we've got you covered.

Help and guidance

Important legal information

Halifax Share Dealing Limited. Registered in England and Wales no. 3195646. Registered Office: Trinity Road, Halifax, West Yorkshire, HX1 2RG. Authorised and regulated by the Financial Conduct Authority under registration number 183332. A Member of the London Stock Exchange and an HM Revenue & Customs Approved ISA Manager.