5 reasons to activate your savings

Here are five good reasons why it pays to put your savings to work. Our digital adviser Nora will help you get started right away.

1. The right time is now

You may think you need to wait to have more money or want to postpone the decision until later. Perhaps you are worried about some volatility in the markets and decide to wait until “the time is right”. But it’s always a good time to start saving and there’s no need to wait or be an expert.

Sitting on your hands may end up costing you more than you think. Many investors have experienced financial losses because they have delayed important decisions. If you hold off on investing, you can miss out on stock market rallies and returns. How much you invest is beside the point – the most important thing is to make your savings work for you.

Why should I save smarter?

Inflation is a measure of the increase in the general price level.

High inflation means consumers can buy less goods and services for the same amount of money, as the value of money decreases. 

2. Time is on your side

In an ideal world, everyone would start saving as soon as they are born. But in reality, most people don’t start putting money aside until they are about 30 years old. You are never too old to become an investor but each second you wait eats away your most valuable asset – time.

That’s why it’s better to start saving early with less money than wait until you’re older to invest a large amount. This gives your money a chance to work smarter, not harder. How does it work? Read more!

Save smart, but keep a buffer in your account

You can decide how big the buffer on your account should be. When your account savings exceed that amount, you can place the excess amount in investments that have a higher expected return.

3. The effect of compound interest

Time is not only your best friend when it comes to investing but it also helps you earn money off of your existing investments. This phenomenon is called compounding. To put it simply: compounding means that you are earning interest on the amount you have already invested. How does it work?

Let’s say you invest 1 000 euros this year with an expected return of 5%. This means that the return on your initial investment will be 50 euros, which will increase the total value of your investment to 1 050 euros. 

What happens if you don’t invest more money next year? You may still get a return on your investment. How is that possible?

Let’s say that you get the same 5% return on 1 050 euros. Last year, your return was 50 euros but now it will be 52,50 euros, as your initial investment has grown 5% from the year before. This means you will have 1 102,50 euros in total.

This is an example of how compound interest works. The effect is at it's best when you save regularly. Read more about the benefits of monthly saving.

4. Don’t wait around

Many people tend to avoid saving and investing because they are afraid of making mistakes in choosing equities or funds. They may think investing is difficult or that you need to be an expert to get started. But anyone can become an investor and there’s no need to wait for the right time because the right time is now. Sometimes the prices go up and sometimes they go down but that doesn’t matter if you are saving in funds. By saving monthly, you are already diversifying your investments and risks. When you add compounding to the equation, you can see that your money is truly working for you.

5. Getting started has never been easier

At Nordea, you can find a way to save that best suits you. We offer you a wide range of the latest savings products and various forms of saving at different levels. 

You can start saving with the help of our robo-adviser Nora, meet with an investment adviser, design your own portfolio and much more. Our expert advisers will help you take your savings journey to the next level and make sure you are in control of your savings.

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Important information about investing

The information provided on this website is intended for general product information only and does not constitute investment advice or recommendations. When it comes to funds or equities, past performance is not a guarantee of future results. The value of fund units or equities may increase or decrease due to market movements, and it is not certain that you will get back the entire amount you invested.