If we’re being honest, a lot of us grew up thinking a savings account was the ultimate money move. Your parents probably told you, “Put your money in the bank. That’s how you grow it.” And back then, it actually made sense — interest rates were better, and the economy was a bit less… chaotic.
But fast forward to today, and here’s the uncomfortable truth: your savings account might not be growing your money at all. In fact, it could be quietly making you poorer.
Before you clutch your M-Pesa statement in shock, let’s break this down.
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The comfort trap of a savings account
We all love that feeling of checking our bank balance and seeing a tidy amount sitting there. It feels safe. Stable. You can even brag to your friends, “I’m disciplined, I save every month.”
But the truth is: that money isn’t really working for you. It’s like having a friend who just sits on the couch all day eating mandazis while you run around hustling — they’re not helping you get anywhere.
Banks do pay interest on savings, but in Kenya right now, most regular savings accounts pay you about 2–4% interest per year (at best). Meanwhile, inflation — the rate at which prices of everything from milk to matatus go up — is chewing through your money at about 6–8% per year.
Do the math and you’ll realise… you’re actually losing value while thinking you’re “saving.” That’s like running on a treadmill and expecting to reach Mombasa.
So, what should you do instead?
Don’t get me wrong — I’m not saying you should ditch your savings account entirely. It still has its place for: Emergency funds (3–6 months of expenses) & short-term goals (like paying school fees next term).
But if your goal is to actually grow your money, you have to step out of “savings mode” and into “investment mode.” Here’s how you can start:
1. Money Market Funds (MMFs) – Your first step into investing
An MMF is like a savings account, but with muscle. Instead of your cash sitting idle, it’s pooled with other people’s money and invested in low-risk places like treasury bills and fixed deposits.
The returns? Usually 9–11% per year — way better than your bank’s 2–4%.
And you don’t need a fortune to start. Some MMFs let you join with as little as 500-1,000 bob.
Quick tip: Set up an automatic transfer from your M-Pesa or bank account directly into your MMF each month. This ensures consistency in your investing and helps you build wealth without relying on constant reminders or willpower.
2. Saccos – Old school, but powerful
Saccos have been winning for decades, and they’re not slowing down.
They invest members’ money, then share the profits back with you in the form of dividends — often 10–15% annually.
The best part? You can get loans at low interest rates, sometimes up to three times your savings. That’s capital you can use for a business, land, or even real estate.
3. Stocks – Owning a piece of the action
Buying shares means you own a slice of a company. If it does well, you earn dividends and your shares increase in value.
You don’t need millions to start. Even Ksh 1,000–5,000 can get you into the Nairobi Securities Exchange (NSE).
Just remember — learn before you leap. Follow financial news, join investment WhatsApp groups, and attend webinars to sharpen your skills.
4. Skills that pay
Not all investments are in stocks and funds. Sometimes the best place to put your money is in yourself. An online course in coding, design, marketing — even baking — can turn into a steady side hustle.
A shilling you earn from new skills will always beat a shilling sitting in your bank account doing nothing.
The mindset shift you need
Most of us keep money in savings accounts out of fear — fear of losing it, fear of taking risks, fear of the unknown. But the real risk is letting inflation quietly rob you year after year.
The wealthiest people don’t just save, they invest. And they don’t wait to start big — they begin with what they have, learn as they go, and keep reinvesting.
So, here’s your move
- Keep 3–6 months of expenses in a savings account for emergencies & short-term goals.
- Take the rest and start small in MMFs, Saccos, stocks, or skills training.
- Commit to growing your money faster than prices rise.
Your savings account was never meant to make you rich. It’s a parking lot, not a highway. If you want to move forward, you need to get your money into the driver’s seat — and the best time to start? Right now.
