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Today, many Kenyans spend their money chasing expensive lifestyles and on misplaced priorities. They don’t have investments, mainly due to inadequate financial education. However, with proper financial education, you can learn how to invest money wisely in Kenya, and that’s what I’ll share.
You can invest your money wisely in Kenya through REITs, dividend-paying SACCOs, stocks trading, high-yield savings accounts, government securities, money market funds, fixed-deposit lock accounts, foreign exchange, copy trading, retirement plans, Airbnb arbitrage, or agribusiness.
With those investment opportunities, you can’t miss something interesting to invest in and earn a meaningful return. To help you get started, I’ll discuss all the 12 ideas so you can know what they are about and whether their pursuit is worthwhile.
Here’s what we shall look at:
- Best ways to save money wisely in Kenya
- Best investments that pay monthly income in Kenya
- How to invest Ksh 1,000 in Kenya
- How to save money wisely in Kenya
Let’s dive in!
In a rush? Below is an overview of how to invest wisely in Kenya!
How to Invest Money Wisely in Kenya for Beginners – Quick Guide
| – | Investment Idea | What to Do: |
| 1 | Real Estate Investment Trusts (REITs) | Buy REITs to start earning dividends in terms of rental income and capital gains. |
| 2 | Dividend-Paying SACCOs | Join SACCOs with the highest dividends in Kenya |
| 3 | Stocks Trading | Buy and sell stocks through the NSE using a reliable NSE-certified stockbroker. |
| 4 | High-Yield Savings Account | Open a savings account that pays interest of at least 12% per annum |
| 5 | Government Securities | Invest in government bonds and treasury bills |
| 6 | Money Market Funds | Join the highest-yielding and consistent money market funds in Kenya |
| 7 | Fixed-Deposit Lock Accounts | Lock money in a fixed deposit account and allow it to grow |
| 8 | Foreign Exchange | Start currency trading using a CMA-certified broker |
| 9 | Copy Trading | Copy expert forex traders in real-time at a fee |
| 10 | Retirement Plans | Join an interest-bearing pension plan |
| 11 | Airbnb Arbitrage | Earn rental income on Airbnb from leased properties |
| 12 | Agribusiness | Start a viable agriculture or farming business |
12 Best Ways to Invest Money Wisely in Kenya
Below are 12 ways you can invest money wisely in Kenya:
How to Invest Money Wisely in Kenya Online
Some of the best online investment opportunities in Kenya include:
1. Real Estate Investment Trusts
Undeniably, some of the richest people in Kenya are in real estate. The problem is that it’s never easy owning physical properties in Kenya. There’s a solution for investors who can’t afford to buy and hold physical properties called Real Estate Investment Trust (or REIT).
REITs are companies that pool funds from people and use them to buy and manage real estate properties. In return, the members earn shares or units, allowing them to earn dividends in rental income and capital gains (or asset sales).
By investing in REITs in Kenya, you automatically become a real estate investor without having to hold a property physically or manage one. Overall, investing in REITs is cheaper as an option like the Fahari REIT allows you to start with a minimum investment of Ksh 700.
2. Dividend-Paying SACCOs
Like REITs, SACCOs pay dividends; the more the SACCO makes money, the higher the dividend. Therefore, consider SACCOs with a reputation for paying the highest dividends and those that are consistent.
Consider an option with an annual dividend rate above 10% on share capital. Some of the best SACCOs in Kenya include Nyati SACCO, Yetu SACCO, Mombasa Port SACCO, Magadi SACCO, and Bandari SACCO.
You need at least Ksh 10,000 minimum share capital to join these SACCOs and claim dividends.
3. Stocks Trading
You can also invest in stocks or company shares (traded on the NSE) and earn dividends. Dividend stocks generally offer steady income as long as the company is making money, and these companies usually pay dividends monthly, quarterly, or yearly.
However, working with the best stockbrokers in the country is essential. They should be CMA-certified; examples include ABC Capital, Sterling Capital, Dyer & Blair, KCB Capital, and Genghis Capital.
4. High-Yield Savings Accounts
While regular savings accounts pay an annual interest of 6-8%, high-yield savings accounts pay 12% and above. Some of the financial institutions with a high yield rate include Stanbic (up to 14% per annum), Branch Microfinance (up to 15% per annum), and Umba (12-16% per annum).
5. Government Securities
Government securities like treasury bonds and bills allow you to loan money to the government and earn from it. But since they are government debts, they are safer.
Overall, treasury bills are short-term securities that allow you to pay a discount rate, after which you earn the full-face value upon the securities’ maturity (3-12 months). You need a minimum investment of Ksh 1000,000 to invest in treasury bills.
On the other hand, treasury bonds are long-term securities that pay interest every six months until maturity (1-30 years). The minimum investment is Ksh 50,000.
Overall, you can buy government securities on CBK’s DhowCSD online platform.
6. Money Market Funds
Money market funds are unit trust investments in safe short-term securities such as treasury bills, high-quality commercial papers, call deposits, fixed deposits, and near-cash equivalents. These investments allow you to earn regular income from the number of units or shares you hold.
Some of the best money market funds in Kenya include Cytonn, Etica, Enwealth, Zimele, Jubilee, and Britam money market funds. Over the past few years, these money market funds have averaged an effective annual yield rate of at least 10%, above what traditional savings accounts pay.
7. Fixed-Deposit Lock Accounts
Instead of saving money in a regular savings account where you can easily access it, how about you do it in a fixed-deposit account? Fixed-deposit accounts allow you to lock your money for a defined period, guaranteeing a particular interest. This is no longer a savings plan but an investment plan.
An option like the MSHWARI Lock Savings Plan is a good one. It allows you to lock your savings for at least six months and pays an interest of 3-6%, depending on the savings. The minimum you can lock is Ksh 500.
Overall, most leading bans in Kenya have fixed-deposit lock savings accounts, and they include KCB, Coop Bank, Absa, Equity Bank, Stan Chart Bank, National Bank, and NCBA Bank.
8. Foreign Exchange
Foreign exchange or forex trading has been gathering momentum in the country lately. It allows you to buy and hold currencies and then sell them at a profit, and you can start with as little as Ksh 500. It’s, however, essential to work with a CMA-certified broker such as Scope Markets, FxPro, or FxTM
9. Copy Trading
Also known as auto trading, mirror trading, or social trading, copy trading involves copying expert forex traders in real time at a fee. Here, you do what the pros do, and the chances of success are much higher since they understand the foreign exchange business better.
You can do copy trading on Exness, Copy Fx, eToro, AvaTrade, or FXTM.
10. Retirement Plan Saving
A retirement plan is not just a savings but also a retirement plan. It allows you to save and watch your money grow until you cash it out. Consider opening an individual pension plan with your bank or insurance provider.
An insurance provider like Britam allows a minimum monthly contribution of Ksh 500 and pays an annual interest of 5%. In contrast, ICEA allows a minimum monthly contribution of Ksh 1,000 and pays 4% yearly interest.
Other Ways to Invest Wisely in Kenya
11. Airbnb Arbitrage
Airbnb arbitrage is another way to invest in real estate without physically owning a property. Here’s how it goes:
- Lease a property for a definite period
- Furnish it the way you want
- List it for rental on Airbnb while meeting all the Airbnb guidelines
- Start earning rental income
12. Agribusiness
Lastly, we must mention the backbone of Kenya’s economy: agriculture. You can invest in the agriculture business sector and earn handsomely. Some of the best investment ideas in the agribusiness sector include:
- Poultry farming
- Dairy farming
- Vegetable farming
- Fruit farming
- Greenhouse farming
- Mushroom farming
- Fish rearing
- Animal feed production
- Pig farming
- Beekeeping
Best Investments That Pay Monthly Income in Kenya
Not all investments pay monthly income. However, some of the best include dividend stocks, treasury bonds, money market funds, REITs, and dividend-paying SACCOs. These investment opportunities are worth considering if you are looking for regular income at the end of the month.
Other options I haven’t discussed are blogging (where you run a monetized blog) and YouTube (where you also monetize the channel). You can monetize with affiliate marketing and an affiliate program like Amazon, which usually pays monthly.
How to Invest 1,000 In Kenya
While Ksh 1,000 may look small, it’s enough to start investing in Kenya. You can invest with little money, as little as Ksh 1,000 or less, in money market funds, SACCOs, forex trading, retirement plans, REITs, and fixed deposit lock accounts.
Most of these investments require a minimum investment of Ksh 500. Of course, the more the investment, the bigger the reward.
How to Save Money Wisely in Kenya
After discussing investments, it’s time we discuss savings. Saving is essential if you want to have some money to invest, and you can learn how to save wisely using these tips:
- Set savings goals and follow them
- Automate your savings if you can
- Lock your savings
- Try the MSHWARI 52-Week Savings Challenge
- Join a retirement savings plan
- Sell unused items to raise more money
- Get a second job or start a side hustle
- Cut down on utility bills
- Start eating healthily but affordably
- Avoid expensive lifestyles
- Avoid debt
- Cancel needless subscriptions
- Try the 48-wait rule – where you wait for up to 48 hours before going ahead with a major expense.
- Use the Cent Warrior Monthly Budget Tracker to budget your money
Concluding Thought:
Learning how to invest money wisely in Kenya requires brilliant ideas. As shared, you can invest in real estate investment trusts, dividend-paying SACCOs, stocks, high-yield savings accounts, government debt, or money market funds. You can also do it through fixed-deposit lock accounts, currency trading, copy trading, retirement savings plans, Airbnb arbitrage, or agribusiness.
Whatever you settle for, give it your all, as the chances of success are high. It’s essential, however, to understand the investment idea better, especially its possible risks, so that nothing comes as a surprise.
