You’ve been putting money aside for a while, or want to start saving? Do you realise that keeping money under your mattress or letting it sit in a bank account isn’t really saving? You’re absolutely right. But where should you put your money to make it grow?
How to decide where to put your money
First, you need to think about what you’re saving the money for. Are you saving for retirement? For a luxury holiday that you’ll happily wait a few years for? Do you want to put money aside in case your washing machine breaks and you need to buy a new one immediately? Do you want to create a passive income that will bring you money? Or are you tempted by a combination of everything?
It’s ideal if you answered “yes” to the last question. Be prepared for different situations and spread your money accordingly.
Short-term saving
Short-term saving means you essentially have your money available at any time. You might need it in a few months or a year. The idea is to have it “at hand” when you need it. Generally, short-term saving is considered to be for months, 2 years.
Savings accounts
Savings accounts used to have quite interesting returns. That’s not the case anymore. Interest rates are low and often barely cover inflation. However, you still have the money available and can send money to and from it as needed. The disadvantage is that the interest rate can change at any time.
Inflation: The devaluation of money over time. Example: You have 100 CZK (about 4.6 USD) and today you can buy more with it than in 2 years. Products and services become more expensive, and the purchasing power of money decreases.
Find an account that offers the best interest rate and has no fees. Be careful that withdrawing money from a savings account doesn’t cost you 100 CZK (about 4.6 USD). You can have several accounts and switch them depending on the current interest rate. Nowadays, you can arrange to open a new savings account online and don’t need to go anywhere.
Medium-term saving
With medium-term saving, you plan not to need the money for 2, 6 years.
Building savings
You can take out building savings for a target amount or a specific date. Even if you save for a target amount, you can withdraw the money after a certain period and not lose the contributions. This period is usually 6 years. Building savings also comes with a contribution from the state. The amount depends on how much you save. The overall return is not spectacular, but it is a risk-free savings option. You can use the money after the building savings period for anything.
Term deposit
A deposit for a fixed term. At the beginning, you agree how long you will have the money deposited and at what interest rate. The agreed interest rate does not change during the term of the deposit. Unfortunately, the interest rate is low and often does not cover inflation. It is therefore possible that in the end your money is devalued. If you need your money before the term deposit ends, you will be charged a penalty.
Long-term saving
Long-term saving is considered to be from 7 years and upwards.
Pension savings
Pension savings are meant to supplement your income in old age. You also receive a contribution from the state and the savings are valued at a certain percentage. Again, there is minimal risk of losing your deposit, so the return is not spectacular. However, some companies now offer more dynamic savings options where a financial institution invests your money in funds. You may experience losses at times. However, given the long-term horizon, there is a high probability that some losses will be offset in future years. Ultimately, you will get more money than with a classic pension savings plan.
Life insurance
Here are 2 products in one. You save and are insured at the same time. One can affect the other. When you calculate, you’ll find that it’s best not to mix these two things. This means arranging for standard accident insurance, which costs several tens to hundreds of crowns per month. It depends on your requirements. And invest the remaining amount you would send to life insurance.
Investments
Investments are better suited to a long-term horizon. Of course, experienced investors who spend hours and hours gathering information can venture into speculation. But I recommend a more sober investment approach for ordinary people over the long term. Long-term investing also mitigates some of the risks associated with investments.
Funds
If you want to invest in funds, you don’t need to set up special accounts these days. This type of investment is now offered by almost every savings account. You can therefore invest different amounts in various risk funds, according to the offer. The rule is that the less risky the fund, the lower the return on your money. You can try buying more aggressive funds, where you can expect interesting profits. However, there is also a risk of losing your finances. This depends on your experience.
Shares
If you want to invest in shares, it’s a good idea to study the company’s accounts. Regularly monitor how the company is doing and whether a potential collapse is approaching. If the company goes bankrupt, you will lose your invested money. However, there are many companies that have been on the market for a long time and are stable. Some companies also offer dividend payments. This is your small share of the profit, which you receive once a year. If you decide to put your money into shares, don’t put it all in one company. Spread your money across at least 10–15 companies. This will reduce the risk of losing your entire investment.
If you want to do it smartly, then for people who don’t want to deal with investments every day, ETF funds are currently the most worthwhile option. These consist of many shares, so you have diversified risk. Passively managed ETFs are ideal, with very low holding costs. These ETFs are ideal to buy on proven investment platforms such as XTB or opt for a smoother, albeit slightly more expensive, option like Portu.
Real Estate
Do you have more money? Buy a flat to rent out. The amount of this investment ranges from tens of thousands to millions. A flat in a smaller town might cost you several hundred thousand. Spend a lot of time choosing before buying. It’s good if the property is in a town that will continue to develop. The location of the flat is also important. Good transport links, shops, a post office, a pharmacy, and so on. If you buy a space for rent in an area where no one wants to live, it will be difficult to rent out.
Land
The amount of land on earth is finite, and this amount cannot be increased, inflated, or expanded. Therefore, if you own land, it’s a great investment. If you decide to invest in land, take it seriously. Choose land that can be further utilised and that has no easements (věcné břemeno).
Not everyone has time to invest, and not everyone understands finance. If you are unsure about saving and investing, it is better to pay for a professional. Find a reliable financial advisor who will take care of your money. However, be careful, as many financial advisors are primarily concerned with their own profits and may pressure you into signing contracts that benefit them. Therefore, choose carefully, perhaps based on recommendations from friends, and trust your instincts. If something doesn’t feel right about a person, find someone else.
Are you already saving, or are you just about to start? Share your answer in the comments and forward this article to others. Thank you.
USD amounts are approximate, converted at the Czech National Bank rate of 21.80 CZK (about 1 USD) per USD on 2 October 2026.
