Cryptocurrencies derive their value from supply and demand, with the buyers and sellers playing an enormous role in the market's liquidity, and ultimately, success. This rings true for stocks, commodities and forex markets too, essentially any asset markets with trading volumes.

Anyone participating in these markets will have been a maker or a taker at some stage, most likely, both. In this article, we're breaking down the concept of makers vs takers, exploring their vital role in the market and large quantities of these result in stronger exchanges. 

Liquidity Explained

Before we dive in, let's first cover an important concept: liquidity. Assets can sometimes be described as liquid or illiquid, this simply refers to how easily the asset can sell. Gold is a prime example of a liquid asset as anyone could easily trade it for cash without any hassle, while a glass statue of your neighbour's cat would be an illiquid asset as the chances of anyone wanting to own it are slim (except for the neighbour, maybe). 

Building on this, market liquidity indicates how liquid a market is. A liquid market means that the asset is in high demand, traders are actively looking to acquire the asset, while also having a high supply, meaning that traders are actively looking to offload the asset. An illiquid market then means that there is low supply and demand, making it difficult to buy or sell the asset for a fair price.

In a liquid market where there are many traders looking to buy and sell an asset, the sell order (ask price) tends to be in the same region as the buy order (buy price). Typically, the lowest sell order will be the same as the highest buy order, creating a tight buy-ask spread. 

Now that we've covered liquidity, it's time for makers vs takers. 

What Is The Difference Between Market Makers And Market Takers?

As mentioned above, any successful exchange requires a fair amount of makers and takers. Let's explore the difference between the two below. 

Market Makers

Exchanges typically use an order book to conduct trades. The order book will store offers to buy and sell as they come in, and execute the trades when the criteria are met, i.e. someone could create an offer that says when Bitcoin reaches $40,000, buy 4. When the BTC price reaches $40,000, the order book with automatically execute this trade. 

In this case, the person creating this buy order is known as a maker. They are essentially "making" the market by announcing their intentions ahead of time via the order book. While many retail investors are makers, the field is typically made up of big traders and high-frequency trading institutions. 

A market maker is a liquidity provider. ‍

Market Takers

Market takers are then liquidity "takers", removing liquidity from the market. Takers create market orders that indicate to the exchange that the trader wants to buy or sell at the current market price. The exchange will then automatically execute the trade using a maker's offer.

A taker is a trader filling someone else's order. Market makers create offers for the order book, making it easier for users to buy and sell, while market takers exercise this liquidity by buying the asset. 

What Are Maker-Taker Fees?

You might have heard of maker-taker fees before, this makes up a considerable amount of how exchanges generate an income (after all, exchanges are businesses that need to make money). When an exchange matches a maker and a taker, they will take a small fee for the efforts on their part. This fee will differ from exchange to exchange, and will also be dependent on how big of a trade it is. 

As makers are providing liquidity to the exchange (an enticing attribute for any trading platform) they will pay lower fees compared to a trader taking away from the platform's liquidity. Always be sure to check the fee structure and pricing on a platform before engaging in any trading activity, these will be outlined in the platform's trading policy.

How Do Trading Companies Make Money?

Cryptocurrency and blockchain technology was designed to provide a decentralized financial system that bypasses government control. However, to alleviate regulatory concerns, exchanges were established to provide a reliable and convenient means of operating within the crypto markets. These exchanges provide a secure way in which users can buy, sell and trade cryptocurrencies, and in return make money through the activities of its customers as it is a business after all.

While maker and taker fees make up a large portion of how a platform generates an income, the business also generates income through deposit and withdrawal fees, commissions made on trades and listing fees. These typically make up the cost of production and running the business.

In Conclusion

Market makers contribute to the market's liquidity by creating orders looking to be filled, while market takers fill these orders. Makers are typically rewarded for bringing liquidity to a platform with low maker fees, while takers pay higher fees when they make use of this liquidity, easily buying and selling the asset. 

Whether dissecting crypto or fiat currencies, the foundations remain the same: the currency must serve as a store of value and function as a medium of exchange for goods and services. While both these currency options tick those boxes, cryptocurrencies tend to also be followed by a dark cloud of volatility in the financial sector. 

Market volatility is a natural byproduct of a developing market, however, it can also cause many losses if not managed correctly. When the crypto markets go through high levels of market volatility they tend to get discredited with being a viable payment option. After paying withness to the Bitcoin market swings, several individuals recognised this flaw in the digital currency space and created a solution, "the stablecoin". 

In this article we establish what is a stablecoin is, how it fits into the financial landscape and explore the pros and cons of these digital currencies.

What Is A Stablecoin?

Stablecoins are digital currencies that harness the benefits of being a decentralized, blockchain-operated currency without volatility. Backed by any currency or commodity, stablecoins are pegged to the value of their underlying asset and managed and secured by their relevant platforms. For instance, Tether is pegged to the US dollar while Tether Gold is pegged to the price of gold and Tether EURt is backed by the Euro. 

These currencies operate like any other cryptocurrency, using blockchain technology to maintain and operate the network, but do not fluctuate in value based on supply and demand. Rather the price remains consistent with the asset it is pegged to, providing a better tool for digital payment transactions.

How Do Stablecoins Maintain Their Price?

While we've established that stablecoins are pegged to a commodity and reflect that price, let's cover how exactly that is achieved. Using fiat-backed stablecoins as examples, the companies behind these coins are required to hold a US dollar equivalent for each coin in circulation (or Euro if the stablecoin is pegged to it). 

These funds, also referred to as reserves, are either held in bank accounts or can be a combination of cash and short-term U.S. Treasury bonds. Most of the companies issuing stablecoins conduct third-party audits to prove that their reserves are at the correct levels and release this information to assure users that their coins are always worth $1 (or the currency-backed equivalent). 

Why Have Stablecoins Become so Popular?

The first stablecoin to enter the market was Tether in 2014, pegged to the US dollar. Tether is currently the third-largest cryptocurrency based on market capitalization, illustrating its vast popularity. The second biggest stablecoin currently on the market is USD Coin, also backed by the US dollar, which sits in the top 5 biggest cryptocurrencies with an equally impressive trade volume. Both these coins have provided valuable talking points within the industry as their market caps and adoption increase and they climb the ranks of the biggest cryptocurrencies.

Due to their resistance towards volatility, stablecoins have increased in popularity and are more widely used for conducting business around the world and executing cross border payments.

The Pros Of Stablecoins

Stablecoins are popular options for both businesses and individuals conducting business across borders. Below we outline the top benefits that stablecoins present to the market:

Digital Currency

The obvious first benefit of stablecoins is that they are maintained by blockchain technology and able to conduct international transactions in a much shorter time frame and for less cost than fiat currencies. The fast settlement times make these currencies an excellent, cross-border medium of exchange. They are also easy to use as they operate from wallets in similar ways to traditional cryptocurrencies.

Zero Volatility

Due to the nature of stablecoins being pegged to a fiat currency or commodity, they typically experience little to no high volatility trading periods resulting in a more reliable currency with the benefits of blockchain technology. Pertinent to increasing its adoption.

Hedge Against Failing Markets

Stablecoins have become increasingly popular for traders to hedge against other cryptocurrencies when markets experience a decline in price. Stablecoins allow traders to quickly liquidate their digital assets and easily reenter the market when the price stabilizes. 

The Cons Of Stablecoins

Centralisation

While blockchain technology and cryptocurrencies celebrate the notion of being decentralised, stablecoins do bring in a nature of centralisation, particularly when it comes to the backing of the assets. Ensuring that each coin in circulation is backed by an equal reserve value requires a team that leans the operation more toward a centralized structure.

Transparency

Several stablecoins have been called out publicly for not being transparent with their reserves. Tether, for example, has seen much public outcry concerning whether the company has the correct amount of reserves, leading to fines and regulations imposed by the US government. They have since released a report on the current reserve holdings of the company. 

In Conclusion

Many traders have incorporated stablecoins into their portfolios, to have as a hedge against falling crypto markets or falling fiat markets. These digital assets are also used by businesses around the world to conduct payments with the benefits of digital currencies and without the risk of volatility. Through the Tap app, users can now access and purchase USD Coin (USDC) as well as Tether (USDT). The sleek design of the app interface makes it easy for users who want to buy or sell cryptocurrencies with fiat currency through their phones in a click. 

When it comes to choosing a stablecoin, consider the projects behind it, the liquidity and the ease of use in terms of wallet compatibility.

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Pump & Dump: Market Manipulation 101

Market manipulation can be described as any attempt to interfere with the free and fair operation of the markets. This concept has become increasingly popular as more companies emerge, but is very much illegal and considered by law as securities fraud. Not exclusive to crypto markets, various acts of market manipulation can be found across all traditional trading sectors including the stock market.

There are many ways to practice market manipulation, one being falsifying numbers to attract investors' interest leading them to invest in the company and buy stocks that they otherwise would not have. Another method of market manipulation, especially crypto market manipulation, are pump and dumps, and that's exactly what we're covering in this article. 

What are pump and dump schemes? 

The term pump and dump can be traced back to the 1990s when the United States broker firm of "Wolf of Wall Street" fame, Stratton Oakmont, artificially inflated the price of the stock they owned. Through false advertising and misleading statements, they created positive sentiment around their shares and then sold the cheaply purchased stock at a much higher price leading to great profits.

Pump and dumps can occur across any industry but are most prevalent on stock exchanges and in the digital assets space. Interestingly, and initially, pump and dumps within the crypto market were largely driven by John McAfee, a prominent businessman and the creator of McAfee software security.

He created trading groups where they would discuss which project to push funds into, driving the price up, and then selling for a substantial profit. People would see the price pumped up by 200% in 15 minutes and purchase the coins, only for McAfees' army to milk the system and quickly sell.

Market manipulation and pumping and dumping

Market manipulation, including the notorious practice of pumping and dumping, is a concerning aspect of financial markets. Understanding these issues within the markets has become essential for investors to make informed decisions.

Manipulators employ various tactics, such as spreading false information, creating artificial demand, and coordinating trades, to artificially influence prices. This wrongdoing deceives other market participants and leads to distorted price movements. By generating hype and inflating prices, manipulators lure unsuspecting investors to buy, only to sell their positions and leave others with losses. Recognizing these deception techniques is crucial for investors to protect themselves and promote fairness and transparency in the markets. 

The stock market and pump and dumps

The stock market, predominantly known to be a dynamic and ever-evolving financial landscape, can still be a target for schemes like pump and dump. These schemes involve manipulating stock prices through false information, only to sell at the peak and leave unsuspecting investors with losses.

Discussions often revolve around individual stocks that are vulnerable to manipulation due to factors like low liquidity or speculative hype. Fraudsters employ various tactics, such as spreading false rumors and creating artificial demand, to execute their pump and dump strategies.

Notable cases, like the infamous "Wolf of Wall Street," serve as strong reminders of how manipulation can have devastating consequences. It highlights the importance of investor education and regulatory measures to protect the integrity of the stock market, a job that the Securities and Exchange Commission takes very seriously in the United States.

Pump and dumps within the crypto market

As touched on above, pump and dump schemes have significant implications in the cryptocurrency market too. Similar to the stock market, different cryptocurrencies are vulnerable to manipulation due to factors like low trading volumes, limited regulation, and speculative interest.

Initial Coin Offerings (ICOs) are often associated with pump and dump activities, where fraudsters exploit the excitement around new token offerings to artificially inflate prices and swiftly sell for profit, leaving unsuspecting investors with losses.

These schemes occur when manipulators spread false information, coordinate buying efforts, and take advantage of the cryptocurrency market's volatility. Understanding the mechanics of pump and dump schemes is crucial for participants to navigate the crypto market wisely and protect themselves from fraudulent activities. 

Regulatory actions and preventive measures

Regulatory actions play a vital role in combating pump and dump schemes, ensuring market integrity and investor protection. Authorities have taken significant measures to crack down on such activities, imposing penalties and legal consequences for those involved in manipulation.

Regulatory agencies also actively collaborate to detect and prosecute offenders, fostering a deterrent effect. Preventive measures are also being implemented, including increased surveillance, stricter reporting requirements, and investor education initiatives.

These efforts aim to create a fair and transparent market environment, where participants can trade with confidence. Regulations serve as a crucial safeguard, working to maintain trust, credibility, and the long-term stability of financial markets.

Within the cryptocurrency sector, regulatory bodies around the world are working on legal frameworks to ensure that the proper regulations are in place to eradicate such market manipulations. This is an ongoing process and one that has generated a lot of attention.

The importance of education for protection

Investor education plays a crucial role in safeguarding market participants from falling victim to pump and dump schemes. Understanding how to identify and avoid these types of scams is vital for protecting investments. By educating yourself and others about the risks associated with pump and dump activities, investors can stay ahead.

Strategies include raising awareness about suspicious investment opportunities, conducting thorough research before engaging in any market, and exercising caution with unsolicited investment advice. If something sounds too good to be true, it usually is.

Staying informed about market manipulations through continuous education empowers investors to make informed decisions and steer clear of fraudulent schemes. Promoting investor education equips individuals with the knowledge and confidence to navigate financial markets safely and protect themselves from potential pitfalls.

Conclusion

In the world of finance, pump and dump schemes have emerged as a threat both in traditional markets and the realm of cryptocurrencies. It is vital for all market participants to be vigilant and educated to protect themselves from these manipulative practices.

While regulatory authorities are taking action to combat market manipulation by imposing penalties and implementing preventive measures, it is through raising awareness and promoting investor education that we empower individuals to recognize and avoid pump and dump scams.

Increasing speculation is that the global economy could be headed for a recession in 2023. This comes as governments around the world continue to grapple with rising debt levels and sluggish economic growth despite massive fiscal stimulus packages. 

Meanwhile, companies are facing headwinds from changing consumer preferences, technological disruption, and escalating trade tensions. All of these factors have raised concerns about whether the current economic expansion can be sustained over the long term. 

Below we explore the likelihood of an upcoming economic downturn and guide you through how to protect your savings and investments should you be faced with one. 

Are we headed for a recession in 2023?

According to economic research conducted by Bloomberg, economists have predicted a 70% chance of a recession next year, up from their 30% prediction in July last year. While not the technical definition, recessions typically take place after two consecutive quarters of negative economic growth, which was seen last year. 

Despite the interest rates and inflation, consumer demand has deteriorated. After two years of bulked-up hiring, job search activity is now also waning. The stock markets have declined approximately 20% in 2022 with speculations indicating that further drops in 2023 are likely to follow suit.

While these stats might cause panic, know that recessions are part of the natural economic cycle. In fact, there have been thirteen recessions since World War II, each lasting an average of 10 months, all of which recovered. With the right preparations, an economic downturn can cause minimal damage to your financial goals. 

How to ride out a recession with minimal damage (hint: emergency fund)

First and foremost, build your emergency savings fund before the recession goes into full effect. This involves saving money to build up three to six months’ worth of expenses that can be used for any unforeseen costs that might pop up over times of economic slowdown. Building an emergency fund is a surefire way to protect your investments and recession-proof your finances.

On top of this, experts recommend putting off any big purchases, especially luxury items, and creating (and sticking to) a budget. Look for valuable money-saving tips and implement these into your day-to-day life. These tips might help you to save money beyond the economic uncertainty and help you to offset the rising costs of living. Consider creative ways to beat the economy and cut costs.

How to manage debt in an economic downturn

If you have a steady job, starting today, increase your payments to eradicate your debt. Don’t underestimate the freedom that comes with being debt-free, not only financially but emotionally too. Once you’ve paid this off you will have more room in your balance sheets to navigate the interest rate hike and increased cost of living typically associated with recessions. 

Should you lose your job, try to minimize your unessential debt repayments and focus on having enough money to cover your four pillars: food, utilities, shelter, and transportation. If you have funds left over, put them in a savings account, particularly if you don’t have your emergency fund set up yet.

Whatever happens, do not get into more debt, high interest debt will only make a bad situation worse. Consider speaking to a certified financial planner if you are unsure.

How to recession-proof your savings

Assuming you still have your job, continue to save money and build your cash reserves. Don’t let economic downturns stop you from moving toward your economic goals. Ideally, you have your emergency savings fund set up to buffer any personal losses and cover your living expenses. This allows you to put your usual amount of savings into an interest-yielding account without any concern for “what ifs”. 

Now is also a great time to review your budget and allocate every cent to a purpose. If there is any extra money left over, incorporate this into your savings or retirement account. If not, revise to see where you can cut spending and fill up your savings jar. 

How to manage your stock market investments during a recession

The golden rule of managing your investments and maintaining your financial position during a recession is not to sell at a loss. Time and time again we see investors make trades based on fear, and ultimately make terrible losses while peers that left their funds in the stock market account see impressive returns once the economy has returned to normal.

Remember: losses are only realized once you withdraw the funds from the investment vehicles. Leave them in there, as with every economic cycle in history, it will get better. And if you have the funds, consider investing a little more - stock market prices will be at “discount” lows. 

Other valuable advice is not to make any sudden changes to your investment strategy, consider investing as a long-term approach. 

Some long-term investors look to incorporate shares in consumer staples companies into their portfolios as a strategy to overcome market slumps. By investing in funds like the Consumer Staples Select Sector SPDR Fund or the Vanguard's Consumer Staples ETF, the hopes are that the success of these funds will offset the losses from other stocks within the portfolio.

Avoid FUD and be prepared

Despite whatever economic situation might arise, rest assured that it shall pass. After all, if you are reading this now then you have most likely lived through several recessions before and come out on top. Don't let any worries stop you from being prepared in case of a recession, after all, these tips above on how to recession-proof your finances are your best chance of coming out on top, again. 

We've all been caught off guard with an emergency payment - from having to replace an appliance to an unexpected medical bill. These things happen and they're out of our control, so it's best to be prepared. Emergency funds are the best way to protect yourself, and a great way to start building your savings. 

These unforeseen expenses shouldn't cripple your savings. With an emergency savings fund, you can recover more quickly and get back on track to achieving your financial goals with little to no stress.

What is an emergency fund?

An emergency fund is easily accessible money stored in a bank account set aside specifically for unexpected expenses or financial emergencies, anything from medical expenses to a loss of income. Emergency savings are typically used for unplanned expenses that fall outside of your normal monthly spending, with the funds stored in a savings account.

These funds allow you to weather the storm and avoid the need (and costs) of taking out a high-interest loan or credit card debt. Keeping the funds in a savings account removes the temptation to spend it, as would be the case if you stored the funds in a checking account.

Why emergency savings are important

Emergency or unexpected expenses without the proper precautions can quickly turn into debt or take a toll on your savings goals. And if hit with two or more in a row, this might cause long-term consequences that cause havoc on your finances. 

Rather rest assured knowing that you have an emergency fund in place should something unexpected happen than fall back on costly loans and credit cards, or even other savings accounts like your retirement savings. 

Emergency funds play an essential role in any reliable financial plan, providing peace of mind and a buffer for your other savings accounts. These funds can be used during periods of unemployment, the sudden death of a family member, illness and disability, or emergency home and auto repairs. Never underestimate the importance of an emergency fund and its impact on your financial well-being should something go wrong.

Start your emergency fund with these 7 simple steps

1. Review your monthly budget and see where you can save

It's critical to understand where your money is going so you can find ways to save it. Budgeting allows you to maximize your income and discover methods to decrease or control your spending.

To do this you can sit down with a financial advisor, or take matters into your own hand with your checking account statements, a pen and paper or a budgeting app. Be sure to review both your checking and savings accounts to get a clear picture. This is the first step in improving your financial health, and to start building your emergency fund.

2. Establish a goal amount for your emergency fund 

A budget is a plan for spending that helps you figure out how much money you'll need each month to meet your essential expenses. A general rule of thumb when looking to build an emergency fund goal is to aim for six months' worth of income, enough to cover monthly expenses for housing, food, and transportation. 

Don't be discouraged by how long this will take, rather establish a goal to work towards and move forward in that direction. Ideally, you want to be able to cover your living expenses for six months.

3. Create a direct deposit to your savings account

Avoid temptation by setting up a direct deposit from your current bank account (or wherever you receive your income) to your savings account. Better yet, you can create a split direct debit which allows you to automatically allocate funds to various accounts, including retirement funds etc. 

If you're new to saving, experts recommend starting with an emergency fund, and once you've established this, move on to other savings accounts. If you already have a retirement fund or money market account set up, continue with this while building your emergency fund. 

4. Little by little increase your savings

Increase the amount you're putting into your emergency fund by 1 percent or a certain amount over time until you've reached your savings goal. Increasing amounts gradually might help to make the smaller deposit into your checking account seem less noticeable and steadily build financial security.

5. Direct any unexpected income straight to your savings accounts

Commit to redirecting any unexpected income to your emergency fund, at least until you have reached your saving goal. This might be money from a bonus, inheritance, a tax refund, lottery winnings etc. 

6. And once you've reached your goal? Save some more

Being unemployed for more than a year or being hospitalized for several months are both situations that require more than a six-month cushion. Should you find yourself here you’ll be glad you have more money saved in your emergency fund.

7. Find a bank account with perks that can kickstart your savings

When opening new checking or savings accounts, shop around by observing bank or credit union offers. Some banks offer cash incentives to new customers. Use this to kickstart your emergency fund, or to add a little extra to an already established one. 

In conclusion

An emergency fund provides a cushion for unplanned events and can help you avoid taking on credit card debt or taking out a personal loan. By putting your emergency money in a high-yield savings account as opposed to checking and savings accounts, you can earn interest while you save money and build your nest egg.

Having an emergency fund saved in a separate account prevents you from spending the money and ensures that it is accessible in the case of an emergency. Emergencies can occur whether or not you are prepared; as a result, being prepared is the best way to deal with a potentially difficult scenario.

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Saving and investing are two key elements to managing one's personal wealth. In this article, we explore the benefits and downfalls of both these tools and give you a broader understanding of the topics.

What Does saving entail?

Saving money is an imperative step in building one's wealth and involves putting money away on a consistent basis, consistency is key. These funds are usually kept in an interest-bearing account, allowing the value to increase passively over the years. 

In the United Kingdom, there are different types of ISA (individual savings accounts) that offer tax-free savings options.

In order to save, one must be spending less than they're earning. 

What does investing entail?

Investing involves buying an asset with the intention for it to accumulate in value. This typically comes after saving, although the earlier the better. People invest in the likes of stocks, commodities, property and even themselves (education, capital for a business) in the hopes of generating returns. 

What's the difference between saving and investing?

The biggest difference between the two is the varying returns you can earn. Saving money in a bank account typically provides returns of 0.5 - 2% depending of the period in time, while the return potential on stock could be much greater.

The other main difference between saving and investing is the risk. So, while earning higher returns on investments might sound much more appealing, the risk is usually greater. Savings accounts carry minimal risk and are usually insured while investment portfolios will rise and fall with the market and are only insured if the investment company fails. Investors should balance the options and establish which risk level they are comfortable with.

In light of these risks, savings are recommended for short term goals while investments cater better to long term financial objectives. This is because long term investments will ride out the ebb and flow of markets and recover even if there is a drop over a certain period. Savings on the other hand are more easily accessible and won't be "interrupted" if the funds are used for an emergency. 

However, savings are also susceptible to inflation as the interest rates are seldom higher than the inflation rates. For example, if your bank is offering a 0.6% interest on your savings account and inflation rose 2%, your savings would have actually decreased in value. Investing typically beats inflation.

The similarities between savings and investing

As both tools are excellent at building and creating more wealth, there are bound to be similarities between the two.

The main similarity between the two is that both options are best started now, whether you're in them for the long or short term benefits. This is due to compounding. Compounding is the process where the interest you earn on an investment or savings account is continuously reinvested, increasing the base sum each period. 

For example, if you put $1,000 into a compounding savings account and earned 2% interest each year. The next year you will be earning 2% interest on the lump sum plus the interest earned, $1,020. The next year you would earn $1,020.40 ($1,020 interest earned, $20.40). This doesn't sound like too much, but over a ten-year period, you would have amassed $219.20 without having done a thing. 

Before you get started

Before getting started on either of these options, ensure that you have a positive cash flow and are debt-free. You'll also need to establish what your risk tolerance is, your short term and long term financial requirements, and when you would like to access the money.

If you don't have one already, you'll want to establish an Emergency Fund that can cover your living expenses for 3 - 6 months. Should you lose your job you can then fall back on this loan and not have to rely on credit cards with high-interest rates. 

Experts also recommend setting up a retirement fund, with automated monthly contributions. Once your emergency and retirement funds are established, you can consider a short term savings account or long term investment, or both. 

Pros and cons of saving and investing

Below we highlight the pros and cons of both tools:

Saving

Pro: Money is accessible and can easily be withdrawn.

Pro: Exempt from market volatility.

Con: Cannot leverage on market gains (potentially missing out on large compound interest benefits).

Con: Susceptible to inflation.

Investing

Pro: Longer time frames allow for favourable compounding interest.

Pro: Could tap into large market gains. 

Con: Exposed to more risk as markets are susceptible to drops.

Con: May incur a penalty if the money is withdrawn too soon. 

The bottom line

Both savings and investment options carry their own set of risks and rewards and it's ultimately best for you to speak to a financial adviser who is able to provide you with calculated professional advice. 

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