Many new investors use these terms interchangeably. However, they have completely different roles in your financial plan.
Savings is the process through which you keep funds aside from your income for the proverbial rainy day. Typically, in cash, these funds come handy during emergency expenses or even certain planned expenses (small amounts) in the near future.
Investment, as defined above, is the process of purchasing an asset today with the hope that it will provide regular income or appreciate in value in the future. The funds invested may / may not be available during the times of need (depending on the investment option chosen).
Traditionally, people are tuned by their families to save money for the future. However, not many families have a history of investments which makes it a second choice. However, merely putting funds aside without investing them can be counterproductive for a variety of reasons:
The biggest benefit of savings is the liquidity it offers. By defining your investment objective to include a certain amount of liquidity, you can get the best of both the worlds. Savings come first, but it is investment that can help you build a future on the foundation provided by savings.