What’s your savings plan?

If you’re saving for a holiday a year from now, it may make more sense to keep your money in an account, as the risk of losing money is low. If, on the other hand, you’re planning to buy a home in five years’ time, you may want to aim for higher returns, by investing in funds, for example. One thing is certain: whatever your goal – near or long term, big or small – it always pays to have a plan.

Whatever your circumstances or level of wealth, we have solutions to help you start building your wealth or manage your existing assets.

We recommend saving regularly with three different time horizons and for three different purposes:

1. To cover unexpected expenses in your daily life
2. To grow your wealth steadily over a long period of time
3. To save for your retirement over an even longer period of time

What kind of investor are you?

Without risk, there is no reward. One investor may aim for a high return, tolerating lots of risk without losing any sleep when the markets are volatile. Another may focus on protecting their wealth, while a third investor could seek to grow their wealth moderately. We offer investment options for everyone, whether you prefer to play it safe or take on more risk.

Do you need help with creating an investment plan? Explore your options:

First, you should ensure that you have enough cash in your accounts to cover your expenses for the next couple of months and to buffer for any unexpected expenses. Flexible savings accounts are best suited for this, as they allow you to withdraw money whenever needed.

• Savings accounts will give you a slightly higher interest than a current account, and you can still withdraw your money any time you like. Discover our savings accounts.
• A time-deposit account, on the other hand, is opened for a fixed period of time, for example five years, and your money will be locked up for this period. A fixed interest rate is paid on the funds deposited in a time-deposit account. 
• You can use an ASP account for saving for your first home for a period of at least two years. Its advantage is that it provides a higher interest rate than a current account, as well as an additional interest paid once you buy your first home. 

Do you have a long-term saving plan and return target that the interest on an account cannot match? Does following the markets and tracking your investments seem like too much hassle? You can save in one of our diversified investment funds, which are managed by a portfolio manager on your behalf. You can choose the investment fund that best suits your risk tolerance and saving period. Different funds have a wide array of investment policies and investment targets. You can also choose between different kinds of fund units, namely growth and distribution units.

It’s also good to understand the difference between actively and passively managed funds. Passively managed funds aim to keep their portfolio allocation as close to their benchmark index as possible, due to which they are also sometimes called index funds. 

A passively managed fund will trade only when its index is updated to reflect the situation in the markets. This can take place two or four times a year, for example. For this reason, the portfolio manager of a passive fund doesn’t have to prepare market analyses or apply their view of the market. As a result, the fund’s fees are lower than in actively managed funds, which aim for a higher return than the market average through stock and sector picking.

Read more about different types of funds below:

• Equity funds 
• Balanced funds
• Long-term fixed income funds
• Short-term fixed income funds
• Passive funds

Regular fund saving is a smart and flexible way of accumulating your savings at a pace that suits your personal circumstances.

Making direct investments in equities is easy: all you need to do is open an equity savings account or set up a trading service and a book-entry account, after which you can start trading in equities through Nordea’s online services. However, making informed share selections requires you to follow the markets closely and read the companies’ financial statements.

A key risk management approach is diversification. Diversifying your investments sensibly is even more important for you as an investor than actively tracking the markets or knowing the companies you invest in. If you diversify your portfolio properly, its value will grow more steadily than without diversification. The value of a well-diversified portfolio won’t collapse if the price of one share crashes.

You can diversify your investments across geographical regions, sectors and asset classes, and make them at different times to gain time diversification. So, for instance, you can buy shares in several different companies from different sectors and different countries and continents – this will reduce your risks. You can achieve time diversification when you buy shares regularly over a long period of time. This way, you will end up making investments when prices are falling and when they are rising, making you less susceptible to buying at the “wrong time”.

Unit-linked insurance, savings insurance, endowment insurance, insurance wrapper. These familiar-sounding terms come under the heading of insurance-based investment products. Despite their name, insurance-based investment products are not traditional insurance policies but long-term forms of saving and investment which are suitable for different types of savers and investors.

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.