Both saving and investing play crucial roles in a solid financial plan. Choosing between the best savings account options, like high-yield savings, CDs, or money market accounts, and riding the waves of the stock market isn’t about right or wrong. It’s about understanding your financial goals and risk tolerance, which could lead you to save, invest, or both.

In essence, savings are ideal for individuals seeking certainty and low risk, while investing is more suitable for those willing to commit their money for longer periods and take on potentially higher returns with the risk of losing some capital.

Michael Powers, a financial planner at Manuka Financial, suggests that for assets expected to be used in the near future (within the next three years), safety and liquidity are key, making options like savings accounts, money markets, U.S. Treasuries, or CDs more appropriate. However, for long-term assets, taking more risk through investing may be suitable to earn higher returns for potential growth and to keep pace with inflation.

Savings accounts provide a risk-free option with fixed or variable interest rates, depending on the type of account. Although returns may be lower than top-performing investments, your money is protected up to $250,000 by the Federal Deposit Insurance Corporation, as long as the bank remains solvent. Most accounts also allow easy access to your funds, though penalties may apply for early withdrawal from CD accounts.

Investing, on the other hand, involves buying shares in companies or commodities, hoping their value will increase over time. While investments come with inherent risks and the potential to lose money, they tend to outperform savings in the long run. It’s generally advisable to invest for the long term to weather any market fluctuations. Investments can be made through self-managed accounts or employer-sponsored 401(k) plans, which may include employer contributions.

Ultimately, the decision to save or invest depends on your risk tolerance, liquidity needs, and understanding of the financial products available. If the thought of losing money keeps you up at night or you need quick access to your funds, a savings account may be more suitable. However, if you’re willing to take risks and invest for the long term, you may find greater returns in the stock market or commodities.

In the end, only you can make the best decision for your financial future.