Investing is a great way to build wealth and financial security. There are so many investment options available that it’s hard to know where to start. For you, as a Kenyan investor, there are specific accounts that should form the basis of your portfolio.
In this article, we will discuss five of these accounts and explain why they are important for building long-term wealth in Kenya. We will also provide an overview of how each account works so that you can decide which ones best fit your needs.
Overview of Investment Accounts in Kenya
Investment accounts in Kenya offer a range of options for those looking to take control of their financial future. Whether you are looking to manage short-term holdings or grow long-term wealth, you’ll find different strategies available, as well as specialized advice from experts.
From putting your money into stocks, bonds, and mutual funds to investing in real estate or precious metals – there’s something to suit everyone’s investment goals.
The key is researching the various products and services, comparing different packages, and deciding which suits your needs best.
Money Market Fund
What is Money Market Fund?
A money market fund is a type of savings vehicle that is designed to provide safety of principal and liquidity for goal-based savings such as emergencies.
This can be an effective option for individuals who want the security of their savings without incurring a substantial risk of loss or the need to commit to an illiquid asset, such as real estate.
Why Do you need a Money Market Fund Account?
These funds are often more lucrative than regular bank accounts due to higher interest rates.
Money market funds have low fees and provide investors with greater access to their savings than traditional investments.
Best Money Market Funds in Kenya
| Company | Interest rate p.a. | Minimum Investment Amount |
| Zimele money market fund | 9.56% | KES. 100 |
| CIC money market fund | 8.69% | KES. 5,000 |
| NCBA money market fund | 9.80% | KES. 5,000 |
| Cytonn money market fund | 10.6% | KES. 1000 |
| Britam money market fund | 9.25% | KES. 1000 |
| Madison money market fund | 9.62% | KES. 1000 |
Sacco Account
Saccos are a popular form of rotating savings and credit associations. A Sacco is essentially a pool of money managed by members who save regularly and borrow from it when they need capital for major investments.
It is best known for its ability to accumulate savings quickly without sacrificing other investments due to its low-cost structure. As well as providing access to credit facilities at lower interest rates, members can access funding for capital-intensive investments such as purchasing land or any future projects with greater ease.
CBK CDS Account
A CBK CDS Account is the perfect way to invest in tax-free government infrastructure bonds. The minimum investment amount is Ksh. 100K, so it’s ideal for those who want to start investing without needing a large sum of money.
With this account, you can expect to receive passive income in the long run, making it an excellent option for those looking to build wealth sustainably and slowly over time.
Brokerage Account
Investing in stocks is a great way to increase your wealth, and one of the most popular ways to do that is through a brokerage account.
A brokerage account is a CDS (Central Depositary Services) account opened through an NSE-approved stock market broker. With this type of account, you can buy shares and stocks, which then accrue dividend income over time.
It offers various advantages, including tax savings and greater liquidity than bonds or mutual funds. Additionally, brokers provide personalized advice and assistance with managing your investments more effectively.
Bond Fund (Unit Trusts)
Bond funds, also known as Unit Trusts, are a great way of investing in bonds for those who may not have the capital to purchase individual government bonds.
Bond funds allow you to diversify your portfolio with a much lower investment than what is required for direct entry into the Central Bank of Kenya (CBK) bond market or Stock Exchange, with amounts as low as KES 5k.