The most common question Times Money hears from millennial readers is “how can I start investing?” It’s daunting, but getting started young will help to make the most of your savings – here’s what new investors should consider.

Step 1 Should you be investing?
Investing in the stock market means putting your cash into company shares, which should rise in value over time, so you could end up with more money than from interest on a savings account. Yet investing is not always the best use of your money. It is a good idea to have three to six months of expenditure in cash as a safety net.

Step 2 Decide what you are investing for
When you decide to invest in the stock market, financial experts often recommend leaving your money there for at least five years. This longer timeframe gives your investment the best chance to grow. If you’ve found a positive stock market prediction for next 5 years, committing your money for that period could potentially result in significant returns. On the other hand, if the stock market prediction is negative, you could potentially lose a lot of money if you invest for the next five years. It’s important to weigh the potential risks and benefits before investing in the stock market.

To start investing, the two straightforward options are an Isa (Individual Savings Account) or a self-invested personal pension (Sipp). You can sign up for these through various banks or investment companies like Hargreaves Lansdown, Bestinvest, or Fidelity Personal Investing. After signing up, you’ll get an online account that allows you to purchase different investments. It’s a step towards potential long-term growth for your money.

The benefit of Isas is that if you need the money back you can sell your investments and take the cash out. The advantage of a Sipp is that any money you put into it will be topped up by the government with an extra 20 per cent if you pay the basic rate of income tax, or 40 per cent if you are a higher-rate taxpayer.

If are investing in funds yourself, diversification is crucial

“That cannot be underestimated,” says Adrian Lowcock, the investment director at Architas. The drawback is that you cannot take money out of a Sipp until you are 55.

If you have a workplace pension, remember that your employer may increase their contributions if you increase yours. It may make more sense to put more into your workplace scheme rather than invest in an extra pension on the side.

Step 3 Go it alone or use a professional?

If you have a small amount of money to invest and are not confident about doing it yourself, it is advisable to see a Financial Advisor for a one-off session and ask them to recommend funds. Funds are baskets of shares in different companies put together by a fund manager. They always have a theme, such as companies from Asia or luxury goods companies.

If you decide to go it alone, many investing websites, known as platforms, will have recommended lists of funds and stockbroker notes about the prospects for company shares. Some will let you put your savings into a set portfolio of funds created by a professional, called a model portfolio

There will be different types based on whether you are a cautious, balanced or adventurous investor and an online survey to help you decide which.

Experts emphasise that picking individual company shares yourself is riskier. If you do, make sure you know the company and your reason for investing in it.

Step 4 Things to bear in mind
Costs. A range of charges are levied by investment platforms and you also pay to invest in funds. They can take a good chunk out of your savings over time. Some platforms, such as Hargreaves Lansdown and Fidelity, offer discounts on fund charges while others give regular investors deals on buying shares.

Try to stay committed and avoid accruing charges by buying and selling on a whim.

The bottom line
Some well-known investment sites and their charges for a stock and shares Isa:

AJ Bell 0.25 per cent annual admin fee (max 7.50 per quarter for shares); 9.95 share dealing for the first nine trades a month, cheaper thereafter; 1.50 fund dealing

Bestinvest 0.4 per cent annual admin fee; free fund dealing; 7.50 share dealing

Hargreaves Lansdown 0.45 per cent annual admin fee; free fund dealing; 11.95 share dealing for the first nine trades a month, cheaper thereafter