When is investing a good alternative to saving
Unfortunately, the time when saving still gave us a high return is far behind us. Last month ABN Amro announced that the interest rate on a savings account will go to 0%. On savings balances of more than € 2,500,000 there will even be a negative interest rate. Time to deal with your savings in a different way. But when should you save and when is investing a better alternative?
Saving or investing?
It's a hot item. The savings interest. First the ABN came with the message to stop giving interest on current savings accounts as of 1 April 2020. The ABN is not expected to be alone in this. It is now waiting for the other banks. De Volkskrant published a paper on alternatives to savings. 2 of the 5 alternatives are in line with the world of BOTS. Investing and crypt currency. But when is saving better than investing and vice versa? Today we explain it to you.
Saving for a buffer
Everybody gets a financial setback every once in a while. A broken car. Your washing machine stops. And so there are countless examples of times when it's handy to have direct access to your money. A savings account is ideal for this. You decide how much you want to have available as a buffer, and you set this amount aside. Your emergency fund, as it were. How much this amount should be differs per person and situation. You can make a calculation using the Nibud buffer calculator. This calculator assumes that the higher your income is, the more buffer you should have. Of course, this is entirely up to you. Therefore, take the outcome as a starting point and start stripping or replenishing from there. Buffer saved? Fine, get out of the way and don't touch it. Or you'll have to deal with such a financial setback.
Saving for a purpose
Many people save for a specific purpose. A nice trip, a new car or maybe for the children's study. For this they open a savings account and they get to work. Every month (or when it comes out) an amount is deposited and slowly but surely the balance of the savings account rises. In some cases a deposit savings account is used for this purpose. You then put your money aside for a longer period of time, at a higher interest rate. Then, for the length of the deposit, you cannot get your money. The average interest rate on a deposit is currently between 0.40% and 0.75%. Depending on the length of the deposit. When the goal has been reached, the money will actually be used for that purpose and your savings account will be empty again.
Investing as an alternative to saving
In both cases above, saving is an excellent option. You set yourself a goal, you achieve it and you can save further for a new goal. Investing becomes a good alternative to saving if you want your money to grow faster than in a savings account. It is better not to invest with a buffer. It is best to save it together, and if you use some of it, quickly replenish it. Investing you do with money you do not immediately need.
Saving for a purpose could be done by investing. With a good trading strategy your returns can increase considerably. Your money will grow much faster than in a savings account. In other words: you get to your savings target faster. Tasty. Time for a new savings target. Who knows, you may have such a taste for it that you will set bigger goals. Maybe you want a second apartment for rent or retire early. Because your money is growing much faster, these have suddenly become things you can think about.
Investing sounds a lot more exciting than it is. We've built an app that gives you access to the best trading strategies in the world. Strategies that were previously only available to the richest 1% in the world. Dishonest, we think. And that's why we've built a platform where the best developers offer their bots. These bots trade for you based on artificial intelligence, machine learning and algorithms. So, bots are basically automated trading strategies. Another advantage: bots don't sleep and don't know emotion. And that benefits your bottom line.
Starting to invest via Bots is easily done. Within 2 minutes you have created an account. Just make sure you have your ID on hand. You need it to create an account. This is a standard procedure for any company offering financial services. Once you've created an account, you can check which bots are currently trading and, very importantly, what their results are. Choose the bot you want to start with and transfer money to your wallet. You can start from € 50,- and you pay via iDeal.
In this way you can try out how you like investing in a way that suits you. And more importantly, how you like the returns. And then you decide for yourself how you are going to achieve your savings targets. In what way and at what speed you want to see your money grow.
Investing is for everyone
Everyone should be able to invest. And now they can. With BOTS. Together we are going to make the world of investment fairer and more transparent. Are you interested, but your question hasn't been answered yet? Take a look at the FAQs on our site. Or contact us, we will be happy to explain it to you in person.
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There is no such thing as risk-free trading. It is possible to lose (part of) your stake.