You might be considering using investing to grow your deposit to buy a house. But unless you’re not planning to make that commitment in the next five years-plus it might not be the best course of action.
You should first focus on maxing out your cash ISA and any other cash savings plans. If you’re looking at a time horizon of over five years investing will start to look like a more promising strategy. Investing has the potential to earn far higher returns than even a high yield savings account.
Investing in a fund or an investment trust is best reserved for those whose timeline to buy a home is flexible and can afford to wait out any fluctuations. This is due to the potential for volatility in the market, meaning you may not see those healthy returns as quickly as you need.
As a rule, the market generally recovers from downturns over time and investments achieve a healthier earnings than cash deposits in the long run.
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