How to Save Fast and Automatically With a High-interest Savings Account?

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Let us admit: not all of us are savings gurus. We visualize the goal, figure out the amount of money needed, and make a resolution to set aside some cash for it every month… But then, our determination gradually dies down, we lose consistency and soon find ourselves far behind our saving goal. You know the story.

Does it mean you are doomed to yield your goals to your inconsistency every time? No! All you need is to get your savings automated. Opening a savings account will keep you on track until you reach your goal. But the good news is that you can get there even faster if you choose a high-interest savings account. Follow us to find out how you benefit from automating your saving habit and a higher interest rate.

Why is automating savings so important?

Making savings for a long-awaited event, emergencies or, say, a retirement is a wise strategy. It helps us to always be ahead of the game. But when we are looking to cover the distance from point A (zero money) to point B, it’s crucial to decide what speed we are going to move at. A high and steady speed wins the race.

Your saving challenge is like a race. Are you moving at a steady speed or make deposits randomly, when you “feel like making a deposit”? A volatile mood is not the only hindrance on our way. Our everyday needs can eat up most of our earnings. So if you don’t secure a certain amount of money right after the payday, you have near-zero chances to cut through those needs and make a decent deposit later.

If you belong to those who easily fall into the trap of inconsistency, automating savings is your best saving plan.
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Benefits of automated savings

  • Official means mandatory. When you automate your monthly deposits, you “officially” refer them to your monthly expenses. This commitment greatly reduces your temptation to skip the payment.

Still unconvinced? How about

  • Peace of mind. Once you step into a monthly contribution program, you no longer ask yourself questions like “How much do I have to deposit this month?” or “When do I reach my final goal?” Because you know the answers.
  • Lots of time saved. Once automated, “making a deposit” can be struck off your to-do list. You can focus on other tasks.
  • More money saved. Making a deposit from your paycheck, not your leftovers, guarantees that more money hits your savings account every month.
  • Reaching goals faster. When you decide to automate your savings through a savings account in Kenya, you can always go for the one with a higher interest rate. This means your money is not just being accumulated but also growing.

While developing your best saving plan, it’s important to define the pace that will be comfortable for you and your family. It’s up to you to decide how aggressive you want to be on your way to your savings goal.

There are several ways how your savings can be automated

  • You can stay with your current bank and set up a deposit or a savings account there. Be aware of the bank fees (maintenance fees and minimum balance fees) and ensure the interest rate isn’t too low.
  • Leverage your employer’s deposit (if any): this way, a pre-defined fraction of your salary goes directly to your deposit.
  • Open a savings account at one of your local savings and credit cooperatives (SACCOs). The benefits here include higher-interest rates and a superior fee-free service.

How to open a savings account with a high-interest rate?

The rule of a thumb says that you find higher-interest rates online. So if you are looking for a real speed-up for your savings plan, consider opening an online-only account. MOMBO SACCO offers the most competitive interest rate of 6% on your monthly deposits of minimum KES 3,000. No maintenance fee is applied, so you can be sure no shilling is lost from your savings. Enrollment is simple using the MOMBO App or through the website.

Automating your finances, start with modest feasible monthly deposits. Later on, you can increase your monthly commitment once you are doing well. Usually, 10% of your paycheck is a comfortable and efficient pace of saving.

Saving 101: A Little Saving Goes a Long Way

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Haba na haba hujaza kibaba is a Swahili saying which loosely translates to little by little fills the measure. With Nairobi being ranked as the fourth most expensive city in Africa, Kenyans are always on the lookout for bargains and ways to stretch the shilling. Below are some tips to keep your spending in check and ensure you are saving up your coins.

 

1.Banking tips

A report by Financial Sector Deepening (FSD) in 2017 estimated the lowest cost to owning a bank account in Kenya to be around Kshs 6,436 per year . This is the average cost for withdrawals, transfers and account maintenance fees. How do you make sure that these costs do not go higher?

  • Plan withdrawals– Banks charge different withdrawal fees while some accounts come with a fixed number of free withdrawals per month. Make sure to find out also from your bank the charges of withdrawing from your bank’s ATM vs. another banks ATM. The difference could be much as from Kshs 30 to Kshs 200.
  • Separate your paycheck– (savings vs. current accounts). You can withdraw from a current account anytime whereas a savings account accrues interest and has limited withdrawals. You can approach your Human Resources Officer to divide your paycheck into these two accounts or have a standing order with your bank where at a specific time of the month, money is transferred from your current to savings account.
  • Low interest loans– The growth of the fintech industry in Kenya has led to the growth of many array of loans one can have access to. There are traditional banking institutions, Sacco’s, mobile money loans apps such as Branch, Tala and Mombo. A quick Google search will present you with tons of quick and unsecured loan options. Be sure to check the reviews of such apps/sites as well as their interest rates as the devil lies in the details.

 

2. Shopping tips

  • Wholesale shopping– Opting for this option saves you money per unit price of items.
  • Deals/discount sites– Be on the lookout for holiday sales such as Black Friday which has caught on especially with e-commerce players such as Jumia. There are also many sales in clothing and electronic stores during the Easter and Christmas period. Buying advance tickets to events on sites such as TicketSasa will always cost you less in comparison to buying them at the gate. Restaurants also run BOGOF( buy one get one free) offers on different days of the week such as Pizza Inn on Fridays.
  • Reward cards/Coupons– Be sure to take advantage of the loyalty cards offered by the various stores especially supermarkets where you accumulate points after every purchase. You are then able to redeem such points in store which goes a long way in achieving your saving goals. Most online retailers also provide coupon codes on their social media or on newsletter for their subscribers.
  • Do It Yourself (DIY)- You can save a lot of money but requires a lot of time input. The internet has infinite ideas on DIY that can be easily executed after a visit to your local hardware store for materials or also using easily available materials in your homes.

 

3. Expense tracking and budgeting tips

It is paramount to know your spending habits in order to have a clear picture on where you can cut your spending. There are many apps available that can help one track budgeted expenses vs. actual spending plus investments if any.  You can also create a personal expense tracking spreadsheet that can contain spending categories with set limits which gives you visual output whenever you go over budget. Most paid apps export also export their reports to Excel.

 

4. Alternative income tips

Are you pushed to the wall and have barely zero savings despite the above tips? You should consider diversifying your income streams. Have you invested in any stocks or bonds?  Do you know any no fee investment funds in Kenya such as one offered by  Mombo App?  Do you have any skills that you could use to do freelance projects? The earnings from such gigs could go into your high interest savings account which will slowly but surely increase the money at your disposal.

 

 

 

 

Bank Fees Eat Up Your Savings? Open a No-Fee Savings Account!

no-fee savings account

Deep in our heads, we understand that savings account must be about saving… But what are those annoying discharges that drain our savings accounts on a monthly basis? They are maintenance fees… You must have felt their thievish manners while trying to set some cash aside for an important event or a long-desired vacation.

But you know what? You don’t actually have to pay for the privilege to save. An online no-fee savings account can cope with your savings goals no worse than a premium bank account. And even yield MORE money due to higher interest rates. We’ll tell how to make your money work harder for you with an absolutely free online savings account in Kenya.

Why is online savings account better?

Both brick-and-mortar and online banking institutions offer fee-free savings accounts. However, online-only savings accounts usually have much higher rates. So if you want a high APY (annual percentage yield) and don’t want maintenance fees, online accounts are your best bet.

You may consider looking for a fee-free high-interest savings account at your local SACCOs. They are not-for-profit financial institutions that offer prominent service and highest interest rates for their members.

Online savings accounts have another exciting advantage. You can manage and control them online using a mobile app. The MOMBO App enables you to enrol and start saving in a few finger taps.

But the list of benefits doesn’t stop here. With MOMBO SACCO savings account, you get access to a loan equal to a 5-fold amount of your savings. This makes this account an all-purpose wallet to support any of your life events. Expected and unexpected.

Benefits of a no-fee savings account by MOMBO SACCO

  • Firstly, no maintenance fees. You can have a peace of mind. You won’t ever experience any unpleasant discharges from your savings account.
  • Convenient access to your savings data from your smartphone, laptop or tablet via MOMBO App.
  • It pays you 6% interest. You can withdraw your accrued yield twice a year, in January and July.
  • The borrowing feature becomes available after 3 months of membership. You can borrow as much as 5 times your savings at the 12% rate.
  • For a loan, you don’t need a collateral (property or money used as a guarantee) for approval. Members guarantee each other with their savings.
  • For a member, qualifying for a loan is a simple and quick procedure. It takes as long as 10 minutes for short-term (6 months) emergency loans. Long-term (4 years) loans get approved in one week.

How to open a savings account at MOMBO Sacco?

  • This cooperative is only for Kenyan salaried employees, entrepreneurs, civil servants or farmers. You can enrol in MOMBO Sacco by making a request through the MOMBO App.
  • To become a member, you’ll need to pass several checks to prove you are credit worthy. Usually, it takes from a couple of hours to 3 working days to get your membership approved. Membership includes buying shares for the amount of KES 10,000.
  • After approval, you can start making deposits (minimum KES 3,000 a month) to your savings account.

Consistent monthly payments are a great way to automate your saving process and also ensure you save more than just leftovers.

Before you open an account, decide which features are crucial to you. A high-interest, loans, no fees, or a mobile app for an easy access to your account? Make sure you choose the best online savings account with the maximum set of benefits and without hidden fees. To open the fee-free savings account, please, download the MOMBO App or enrol right on this website.