When it comes to short-term saving goals, it could be worth considering an easy-access savings account, a cash ISA, or a fixed-term savings account. If you’re not sure which type of account is right for you, you can compare the benefits: visit our ‘How to choose a savings account’ page to find out more.
Money you hold in savings accounts is protected by the Financial Services Compensation Scheme (FSCS) up to £85,000 per person, per institution. Savings accounts could also offer more stability than investments, as they’re not affected by the ups and downs of the stock market.
But investing in stocks and shares could be a helpful part of a long-term strategy if you have more time to weather any potential losses, while taking note that there are still risks when it comes to investing. It may not be the best fit if you have a shorter time horizon for your money goals.
Saving in cash can also make it easier to access your money, which can be a consideration for short-term needs.
For those reasons, savings accounts can be more attractive for short-term goals. Although rates of return are usually lower than on the stock market, your money is safe, will gain interest, and could be easy to access.