52 Week Savings Challenge - Tool

This challenge offers a simple and effective way to start your savings. The idea is to save an incremental amount every week. At the end of the year, you not only have a lump sum, but you have also formed a saving habit. Start at any time, and keep saving for 52 weeks. Get started today!

The Rule of 72

The Rule of 72 is a simple way to determine how long an investment will take to double given a fixed annual rate of interest. By dividing 72 by the annual rate of return, investors obtain a rough estimate of how many years it will take for the initial investment to duplicate itself. So if your rate of return for KES 10,000 is 10%, it will take 72/10 = 7.2 years to make another KES 10,000.

Fixed Deposit

These are accounts offered by banks and other financial institutions. In this option, you commit your money to the bank for a fixed term from 1 month to 2 years. During this time, the financial institution invests the money on your behalf and pays you an interest amount at the end of the term. At the end of the period, you can choose to renew your fixed deposit or cash out. Should you require your money, you close the account and lose all interest amounts.

You get better returns for fixed deposits with large amounts and longer fixed terms (i.e. from 1 year) which makes it unsuitable for an emergency fund. You could counter this by doing a short term 90 day fixed deposit, but you’ll get lower returns. Further, this option doesn’t allow you to top up every month but only at the end of the term, so it is not a flexible saving or investment option. While this is a safe option, the rates provided by banks are meagre.

Treasury Bills (T-bills)

When you buy a T-bill, you are lending to the government. They are safe investments since the government backs them and have a low rate of return. They are short-term investments ranging in duration from a few days to one year. In Kenya, you can get t-bills for 91-day, to 182-day and 364-days. The longer the term, the better the return.

T-bills are auctioned in Kenya every week, and you can purchase them through your bank or by opening a CDS account. The minimum amount you can invest in t-bills is KES 100,000. Again, you only have access to the money at the end of the term. The benefit of the t-bills is that it is safe and you get your return upfront. If you want to buy t-bills worth KES 200,000 (face value) at a rate of 8% (coupon rate), you will pay KES 184,000 (discount rate) to get your t-bill, and at the end of the term, you will get paid back KES 200,000.

Treasury Bonds

Bonds are a secure mid to long term investment ranging from 1 year to 20 years and offer you payments every six months during the term of the bond. Unlike other assets that have variable returns, bonds have a fixed return rate for the entire duration. The Treasury auctions bonds every month, and you can purchase them through your bank or by opening a CDS account.

Let’s say you want to spend KES 10,000,000 on a 4-year bond with a coupon rate of 10%. Every six months, you will get a payment of KES 500,000, and at the end of the bond’s life, you will have made KES 4,000,000. Most people use bonds for lump sum investment like pension, as the more money you put in, the higher the return. Bonds are an excellent product for the money you don’t need, but you need to keep safe and intact while earning a return. The minimum amount you can spend on a bond is KES 50,000. You can sell your bond before maturity at the NSE.

If you buy a newly floated bond, you buy it at a price set by the Treasury. If you purchase an already existing bond from the NSE (secondary market), the price will be higher and increase the closer the bond is to maturity. Do note that the payment dates are six months from the issue date of the bond. So if the bond starts in August, payments will be in February and August every year even if you buy the bond in December. Your coupon rate will be pro-rated for the first pay-out to reflect the duration between December and February.

M-Akiba is a retail variant of the bond to encourage savings and increase access to investment vehicles for the average Kenyan. The minimum investment is KES 3,000, and it is tax-free (not all bonds are tax-free). All transactions are available on mobile phone with payment options through M-Pesa or Pesalink.

Mutual Funds

These are investments made on behalf of a group of investors.  The investors pool funds that are managed by a portfolio manager.  Different funds have different purposes like health, tech, real estate, and the portfolio manager invests the capital in securities (stock, bonds, money market instruments, assets) that relate to the purpose of the fund and try to generate incomes for the investors. Mutual funds are open-ended. All funds charge a management fee either upfront or at the end when you’re cashing out. Mutual funds work for both lump sum and incremental investments. There are many forms of mutual funds like Money Market Funds, Balance Funds and Equity Funds.

Money Market Funds (MMFs)

A money market fund is a kind of mutual fund that invests in highly liquid, near-term instruments.  These instruments include cash, cash equivalent securities, and high-credit-rating, debt-based securities with a short-term maturity (such as Treasury Bills). Money market funds offer investors high liquidity with a low level of risk. Returns are calculated daily and are credited every month to your account, net of costs. MMFs work for a lump sum or incremental investment. You can use a unit trust, for instance, to store your emergency fund. MMFs are flexible and not time-bound. Unit trusts typically do not have management fees and are easy to set up. You can purchase units at any time and begin earning returns immediately. You can also withdraw units at any time and will usually have the money back in your bank account or M-Pesa within 72hrs. Examples of Money Market funds in Kenya include but not limited to Sanlam Unit fund, CIC Unit Trust, Zimele, and Britam Unit trust.

Equity Fund

Equity funds are a type of mutual fund where the fund invests principally in publically listed stocks. Each fund has a different mandate around specific themes (FMCG, pharma or tech), market capitalisation (large, small, medium, mixed), geography (international equity funds, global equity funds, worldwide equity funds, or domestic equity funds) or investing style of the fund manager (private equity funds, equity income funds, dividend growth funds, index equity funds). Equity funds are considered high risk with promises of higher returns in the form of capital gains and dividend returns. They can be fixed-term where you can’t sell your shares before the term is over and the fund closes once everyone cashes out or variable duration where you can buy and sell units at any time at the prevailing price of a single unit. Cashing out will usually have a charge attached.  Some companies that offer mutual funds in Kenya are CIC, Dry Associates, Old Mutual, Sanlam, Britam, among others.

Balanced Fund

Balanced funds invest money across asset classes, including a mix of low- to medium-risk stocks, bonds, and other securities like bank deposits, commercial papers, and property. Balanced funds invest with the goal of both income and capital appreciation via capital gains, dividends return and interest. They serve conservative investors seeking growth that outpaces inflation and income that supplements current needs. A balanced fund offers a lower risk profile than pure equity funds.

The fund is not time-bound and has monthly, quarterly, bi-annually and annual payment options. Some funds also offer the option to reinvest the payments and benefit from compounding the returns. However, this option usually comes with an early redemption fee.

Sum insured

This is the maximum value for a particular year that the insurance company can pay if you are hospitalised.


These are caps placed by health insurance companies in health insurance policies in the form of a predetermined limit on the claim amount for a specific disease and/or treatment procedure. It can be a percentage of the sum assured or a specific amount.

Chronic condition

This is a health condition or disease that is persistent or otherwise long-lasting in its effects or a disease that comes with time. It requires on-going medical attention and management.

Medical pre-existing condition

This is a medical condition that started before a person’s health insurance went into effect.