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Savings & Investments

Understand the difference between saving and investing, the main types of investments, and how your bank can support you when making or managing investment decisions.

Saving and investing can help you manage your finances and prepare for the future.

Savings generally focus on protecting money and keeping it available for short-term needs, while investing aims to grow your money over time by investing in financial products.

Investments can offer higher potential returns, but their value may also decrease. Before investing, it is important to understand the products, the risks involved and whether they match your personal situation and objectives.

Key takeaways

  • Savings and investments serve different purposes and can complement each other.
  • Investments can provide opportunities for long-term growth but involve risks.
  • Financial instruments include products such as shares, bonds and investment funds.
  • Banks can provide different investment services, depending on how much support you want when making investment decisions.
  • You may make investment decisions yourself, receive personalised advice or entrust the management of your portfolio to your bank.

Saving vs investing: what is the difference?

Saving

Saving means putting money aside, usually for short-term needs or future projects.

Savings can help you:

  • keep money available when needed;
  • build financial security;
  • prepare for unexpected expenses.

Investing

Investing means using money to buy financial instruments with the objective of generating returns over time.

Investments can include:

  • shares;
  • bonds;
  • investment funds.

However, the value of investments can increase or decrease depending on market conditions.

Understanding investments

An investment means placing money into financial instruments.

Financial instruments are products that can be bought or sold on financial markets or over-the-counter markets.

They include, in particular:

Shares

Shares represent ownership in a company.

Bonds

Bonds are loans made to companies or governments. The issuer generally pays interest and repays the amount borrowed at the end of the term.

Investment funds

Investment funds pool money from several investors and invest it in a portfolio of financial products.

Other financial instruments

Some financial instruments, such as derivatives, have a value linked to another asset, such as a share or currency.

How can you invest through your bank?

Banks can offer different services to help you invest in financial instruments. Depending on the service you choose, you may make investment decisions yourself, receive personalised recommendations, or entrust the management of your portfolio to the bank.

Placing orders

You decide which financial instruments you want to buy or sell and instruct your bank to execute the transaction.

You make the investment decision.

Investment advice

Your bank provides personalised recommendations based on your investor profile.

You decide whether to follow the recommendation.

Portfolio management

You agree on an investment strategy with your bank, which then manages your portfolio within that framework.

The bank makes individual investment decisions on your behalf.

In both cases, the bank needs information about your situation, objectives, knowledge, experience and risk tolerance to assess which investments or strategy are appropriate for you.

Important

When you place an order without investment advice, the decision to buy or sell belongs to you. The bank executes your instructions but does not make the investment decision for you.

Placing orders for financial instruments

If you prefer to make your own investment decisions, you can instruct your bank to buy or sell financial instruments on your behalf. This is known as an order execution service.

Depending on the type of financial instrument involved, your bank may need to assess whether you have the necessary knowledge and experience to understand the risks. Once your order has been executed, you receive information confirming the transaction.

What is investment advice?

Investment advice means that the bank provides one or more personalised recommendations about financial instruments, such as shares, bonds or investment funds.

A recommendation may include:

  • buying an investment;
  • selling an investment;
  • keeping an investment;
  • exchanging one investment for another.

Important

You decide whether or not to follow the recommendation. The final decision always belongs to you.

Understanding your investor profile

Before providing investment advice or portfolio management, the bank needs to understand your situation and assess which investments or investment strategy are appropriate for you.

The bank considers, in particular:

  • your financial situation;
  • your capacity to bear losses;
  • your investment objectives;
  • your investment horizon;
  • your risk tolerance;
  • your knowledge and experience of financial markets;
  • your sustainability preferences.

Based on this information, the bank establishes your investor profile and, where appropriate, defines an investment strategy adapted to your profile.

What information do you receive with investment advice?

When the bank provides investment advice, it gives you information about the recommended financial instruments or transactions.

This may include:

  • information sheets about shares or bonds;
  • key information documents (KID) for investment funds.

Each recommendation is accompanied by a suitability statement explaining why the advice is appropriate for your profile.

What are the costs associated with investment advice?

Before signing the agreement, the bank provides an estimate of the costs linked to the service.

Before each transaction, you receive information about costs and fees related to:

  • buying financial instruments;
  • holding securities;
  • selling financial instruments.

Possible fees include:

  • investment advice fees;
  • transaction fees;
  • custody fees.

You also receive an annual summary of the fees you have paid.

How does portfolio management work?

With portfolio management, the bank invests your money in different financial instruments, such as shares, bonds or investment funds. Together, these investments form your portfolio.

You agree with the bank on an investment strategy based on your investor profile. The bank then manages your portfolio and makes individual investment decisions in line with that strategy.

Important

The bank does not need your approval for each individual investment decision, provided it acts within the agreed investment strategy.

The bank also informs you if the value of your portfolio falls significantly, according to the threshold applicable to your contract.

What information do you receive with portfolio management?

Your bank provides regular reports to help you understand how your portfolio is being managed.

These may include:

  • the composition and value of your portfolio;
  • the performance of your portfolio;
  • fees and costs;
  • payments received, such as dividends or interest;
  • transactions carried out on your behalf.

What are the costs of portfolio management?

Before you sign the contract, the bank provides information about the expected costs of the service.

Depending on the service and pricing model, costs may include:

  • transaction fees;
  • custody fees;
  • portfolio management fees.

You also receive an annual summary of the fees you have paid.

Tips for getting started

  • define your financial goals;
  • understand the products you are considering;
  • consider your investment horizon;
  • make sure the investment matches your risk tolerance.

Before investing, take time to understand your objectives and the options available. Your bank can explain the investment services it offers and provide information adapted to your situation.

More information - Orders for financial instruments

More information - Investment advice

More information - Portfolio management

Simone Kayser

Simone Kayser

Senior Adviser - Retail Banking

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