When you save, you are conserving money. The techniques of saving money includes putting money in a bank by opening a bank account, you can also save money through a pension plan. Savings is also the reduction of expenditure, especially those expenditures that are recurring in nature. Savings in terms of personal finance indicates low-risk preservation of money.

Personal Finance and Savings
In the aspect of personal finance, savings corresponds to nominal preservation of money for use in the future. An interest yielding deposit account is typically a method of keeping money for use in the future when the need for it arises. Such saving is for keeping an emergency fund for capital purchase (for example car or home) or for other purposes such as children’s education funding or tax bill. In the context of personal finance, when fund is used to buy shares, placed in a collective investment scheme or the purchase of any asset that poses an element of capital risk, it is seen as investment. This distinction is vital since the investment risk can lead to a capital loss at the realization of investment, contrary to cash savings.

Cash savings accounts are associated with minimal risks. In the U.S, it is required of every bank to have a deposit insurance which is issued by the FDIC (Federal Deposit Insurance Corporation.  In severe instances, deposit can be lost when the bank goes down; this was experienced at the beginning of the Great Depression. But with the creation of the Federal Deposit Insurance Corporation, deposits cannot be lost when a bank is distressed. In a lot of instances, savings is used interchangeably with investment. For instance, a lot of deposit accounts are labeled as investment accounts by the financial institutions for the purpose of marketing. In order to establish if an asset is regarded as saving or investment, you should seek to find the answer to the question of where your money is invested. Perhaps your answer to this question is cash; if so, then it is savings; if the asset is such that can go up and down in nominal value, then it is regarded as investment. There could be problem associated with long-term money saving; in a time frame say 30 years, the value of such fund will reduce to about half its original value as a result of inflation if inflation rate is assumed to be 2 to 3 percent.

The Issue of Interest Rates
Interest rates will adjust to equate saving and investment; this is posited by classical economics, avoiding overproduction. When there is increase in saving, interest rates will drop, motivating investment. However, another great economist (Keynes) is of the opinion that both saving and investment were not responsive to interest rates. Going further, the demand for and supplies of stocks of money spelt out interest rate in short run. Therefore, saving could be more than investment for substantial period of time resulting to a recession and general glut.