This guide addresses common questions about saving money in Kenya, offering practical advice and highlighting the best savings options available.
1. How to Save Money from Your Salary in Kenya
a. Implement the 50/30/20 Rule
This budgeting method allocates:​
- 50% for necessities (e.g., rent, food, transport)
- 30% for discretionary spending (e.g., entertainment, dining out)
- 20% for savings and debt repayment​
For instance, with a monthly salary of KSh 45,000, you would allocate KSh 9,000 to savings. ​Business Daily
b. Automate Your Savings
Set up automatic transfers to your savings account immediately after receiving your salary. This “pay yourself first” approach ensures consistent saving.​
c. Reduce Unnecessary Expenses
Identify and cut down on non-essential expenses, such as frequent dining out or subscription services you rarely use.​
2. How to Save Money Online in Kenya
a. Utilize Mobile Banking Platforms
Platforms like KCB M-PESA and M-Shwari offer convenient ways to save money online.​
- KCB M-PESA: Allows you to open a Target Savings Account directly from your phone. Safaricom​
- M-Shwari: Enables you to save as little as KSh 1 and earn interest up to 6.3% per annum. Safaricom​
b. Explore Digital Savings Apps
Consider using digital savings apps that offer features like goal setting, automatic savings, and financial tracking to enhance your saving habits.​
3. Best Places to Save Money and Earn Interest in Kenya
a. KCB Goal Savings Account
Offers competitive interest rates and allows you to lock your savings for a period between 6 months and 5 years. ke.kcbgroup.com​
b. Co-operative Bank’s Hekima Savings Account
Provides attractive interest rates with zero monthly fees, making it a suitable option for long-term savings. Co-operative Bank Kenya​
c. Equity Bank’s Jijenge Account
Known for customer-centric services and relatively higher interest rates, it’s a popular choice among savers. LinkedIn​
4. How to Save Money Fast on a Low Income
a. Prioritize Essential Expenses
Focus on covering necessities and avoid impulse purchases.​
b. Increase Your Income
Explore side hustles or freelance opportunities to supplement your income.​
c. Join Savings Groups
Participate in chamas or merry-go-rounds, which are community-based savings groups that encourage regular saving and provide lump-sum payouts on a rotating basis.​
5. Clever Ways to Save Money
a. Buy in Bulk
Purchasing items in bulk can lead to significant savings over time.​
b. Utilize Public Transport
Opt for public transportation instead of personal vehicles or taxis to reduce transportation costs.​
c. Cook at Home
Preparing meals at home is generally more cost-effective than eating out.​
6. Difference Between Fixed Deposit and Target Savings Account
Fixed Deposit Account
- Interest Rate: Typically higher (e.g., 8.5% per annum).​
- Access to Funds: Funds are locked for a fixed period; early withdrawal may result in loss of interest.​
Target Savings Account
- Interest Rate: Competitive rates (e.g., 6.3% per annum).​
- Access to Funds: Allows for regular contributions towards a specific goal; early withdrawal is permitted but may affect interest earned.​
7. How to Withdraw Money from KCB Target Savings Account
To withdraw funds:
- Go to the M-PESA menu on your phone.​
- Select “Loans and Savings.”​
- Choose “KCB M-PESA.”​
- Select “Fixed Savings Account.”​
- Choose “Target Savings Account.”​
- Select “Withdraw.”​
- Enter the amount and confirm the transaction with your M-PESA PIN.​
Note: Early withdrawal of funds from the Target Savings Account is allowed, subject to withdrawing the entire amount saved. Interest earned up to the date of withdrawal will be paid. Safaricom​
Conclusion
Saving money in Kenya, whether from your salary or through online platforms, requires discipline and the right financial tools. By understanding the various savings options available and implementing effective budgeting strategies, you can achieve your financial goals and build a secure future.
