All of us want to save money and earn a little interest on the side. In these unpredictable times, it’s important to be able to save money and grow it. But, where can you part with your money and earn more while at it?
Find out more about all the different types of ways you can save and invest your money and watch it grow. Saving money and earning interest will help your money grow with little effort. In this article, we look at the best places to save money and earn interest in Kenya.
Where should you put your savings?
The first step is before you choose where to put your money, you need to answer two very important questions. The two questions are:
- What are you saving for?
- When do you need the money?
The reason you are saving money determines where you put the money. For instance, if you are building an emergency fund, you need to save the money where you can access it quickly.
On the other hand, if you are saving the money for a down payment to pay for a house, then you will need to save it somewhere it can earn decent interest.
The first step before you select where to save money is to review your goal and place it in the most appropriate account. Alternatively, you can choose to have multiple accounts for different goals. The ideas below can help you save money and ensure it grows.
Savings account
A savings account will earn you interest while you still have access to your money. Most banks allow you a limited number of transactions and withdrawals. Most banks will give a better interest rate than for the operating accounts.
A savings account will give you a range of 0.5% p.a. to 8% p.a. Go for a savings account that gives you a higher interest rate. Below are some of the best saving accounts and their rates.
| Bank Name | Savings account | Minimum Savings | Interest p.a | Accessibility |
| KCB | Simba savings account | Ksh 1000 | Earn up to 5% P.a | Limited withdraws |
| KCB | Target/Fixed savings account | Ksh 1000 | Up to 6.3% for the agreed lock period | No, withdraw until the lock period ends. If you withdraw before the lock period ends you lose the interest |
| Standard chartered bank | Safari savings account | 0.50% for 1 million and below. Depends on the amount in your account. | Limited withdraws | |
| National Bank | Ahadi savings account | Ksh 1000 | 5% p.a | Withdraw once every three months |
| Absa Bank | Absa Digital savings account | No minimum balance | 7% ( fixed interest rate) | Limited withdraws |
| Absa Bank | Target savings account | No minimum balance | 7% p.a for a target period of 1 to 10 years | Withdraw at the end of the target period |
| Co-operative bank | Hekima Savings account | No minimum balance | An interest rate of between 3% to 5% | One withdrawal per quarter |
| DTB Bank | Just for me savings account | Ksh 1000 | 3% p.a credited twice per year into your account | One withdraw every quarter |
| Equity Bank | Eazzy save | No minimum balance, Better interest for balance above Ksh 20,000 | 4% p.a | One free withdrawal every month |
| Equity bank | Jijenge account | Ksh 300. Minimum month contribution of Ksh 300 | 4% p.a | After the end of the lock period. |
| NCBA Bank | Gold savings account | Ksh 2000. The only amount above Ksh 5000 earns an interest | 3% p.a | One free withdrawal per month |
| Sidian Bank | Premier savings account | Ksh 10,000. Available in other currencies such USD, GBP, EURO | 7% p.a paid monthly into your account. | One over-the-counter withdrawal per quarter. |
| Stanbic Bank Savings account | Pure savings account | KSh 5000 | Up to 3% p.a for saving 0-500,000. Above ksh 500,000 earn an interest of 3.5% | One withdrawal per quarter |
| I & M Bank | I & M savers account | Ksh 1000. Minimum operating balance of Ksh 5000 | 4% p.a Paid monthly | Limited withdrawals |
| I & M Bank | Goalz account | Ksh 1000. Save a minimum of Ksh 1000 per month | Depends on the account balances maintained | Withdrawal after the lock period. |
To give you an idea of how much you will earn from your savings account, use our savings account calculator below if you want to save a lumpsum amount of money.
Use this calculator if you save on a monthly basis. For instance if you are following the a save money challenge like the 52-weekly savings challenge this is the calculator to use.
The amount of money you will receive will be less 15% withholding tax . Any interest you earn will be charged a 15% withholding tax
Fixed deposit accounts
A fixed deposit account (FD) is offered mostly by banks and is an investment instrument where you save a sizable amount of money for a given period and earn interest. The interest rate of an FD account is predetermined.
It is among the best places to save your money and earn interest as you are guaranteed both the interest and your principal amount. With a fixed deposit, you are not allowed to withdraw the money until the agreed period lapses.
If you have been following the 52 weekly savings challenge and you have gathered enough, consider moving your money to an FD. Here are the fixed deposit accounts in Kenya and their interest rates.
| Bank | Minimum amount | Lock period | Interest rate | Other fees | Link |
| Standard Chartered Bank | Ksh 100,000 | 1 month to 1 year | Earn interest of 1.15 for 1 month to 2% for a year | Standard chartered Bank | |
| Co-operative Bank | Ksh 20,000 | 1 month to 1 year | Earn 2% to 7% depending on duration and amount | ||
| Equity Bank | Ksh 20,000 | The minimum period is 1 month | Earn up to 9.5% and a minimum of 6.65% | ||
| KCB Bank | Ksh 500 | 1 to 12 months of investing | 6% p.a | ||
| Absa Bank | Ksh 50,000 | Up to 12 months of investing | 7% | ||
| Stanbic Bank | Ksh 20,000 | 1 to 12 months of investing | 6% | ||
| National Bank | Ksh 20,000 | 1 to 12 months of investing | 7% |
The fixed deposit account rates may change from time to time.
Money market funds
Money market funds is one of the best places to save money. The reason is you earn a better interest as compared to a savings account. Money market funds invest in highly liquid and short-term instruments. In Kenya, the money market funds invest in cash deposits, treasury bills, treasury bonds, commercial papers, and corporate bonds, among other instruments.
Before you select a money market fund to invest in, do your due diligence. Check to see what instruments the fund specializes in, what its yield is, and whether it is regulated by a capital market authority. find out the minimum you need to invest in the money market fund.
Below is a summary of the money market funds in Kenya and the yield you can expect.
Call deposits.
A call deposit account is a type of investment bank account that offers both a savings account and an operating account. In simpler terms, a call deposit account requires you to maintain a minimum operating balance in exchange for a higher interest rate.
The call deposit account gives you the option to withdraw the money anytime you need it. With a call deposit account, the interest you earn depends on the amount in your account and the interest rate offered by the bank.
The main advantage of a call deposit account is you can access your cash when you need it, and you earn interest.
In Conclusions
There are many ways to save money but finding the best places can be tricky. We have compiled a list of five great places to start saving your money so you can get your finances in order and start building your future. If you are looking for a way to grow your portfolio, these are the best ways.
Whatever route you decide to go, remember to shop around for the best rates and terms before committing to anything.
