Lenders are offering frugal Kenyans higher returns to keep their money in bank accounts as the competition for deposits starts to pick pace. High interest rate environment will make money expensive and those with good savings habits could earn a windfall as banks offer higher returns.
Absa Bank Kenya, for instance, is taking its campaign digital, where the cost of onboarding savers is low and the ease of reaching them is very high especially among the younger workforce.
The lender promises to reward savers at 9 percent interest with your money-earning monthly payouts making the investment fairly liquid.
Cash is king in tough times
Kenyans are holding onto billions of shillings under mattresses, associated with general fears over the economy.
Currency in circulation increased by Kes10.6 billion, an increase of 3.5 per cent even as Central Bank of Kenya (CBK) data showed that cash in easily accessible savings accounts stood at Kes1.7 trillion in July representing a Sh38.9 billion growth compared to June.
The Bank said net increase of currency in circulation was attributed to higher currency outflows (withdrawals) compared to the net in-flows (deposits).
As Kenyans battle inflation, job cuts and slowing economy, savers tend to use up their deposits instead.
This reduces the pile of available deposits against demand by intermediaries, even as high interest rates mean savers can get better deals across competition which will have an effect of raising the cost of funds.
Good time to be a saver
Banks will now be willing to pay higher for savings making them an attractive investment opportunity, especially for young savers. Younger workers worried about the economy are trying to beat the gloom by finding good investment opportunities to maximise their returns.
According to a consumer trends study by marketing consultants Pierrine, 22 per cent of respondents said the were looking to save for a rainy day as a personal finance strategy during the tough times.
In order to better manage their finances, young consumers are employing financial strategies such as debt avoidance, budgeting, investing and setting financial goals.
How to get started on your savings journey with Absa
- Go to the Absa website – www.absabank.co.ke.
- Click on Save, select your Savings Account of choice, click apply online and follow the prompts.
Please, have scanned images of the documents below handy as you sign up for the account:
- Copy of Kenyan National ID (You can also take a picture of your I.D. with a maximum size not exceeding 2G.B.)
- Sample signature (signed on white paper)