Where to invest money in Kenya:Legit

If you are looking to invest in the Kenyan economy, then there are many opportunities available for you! Whether it be through investing in shares or treasury bonds, there is an option that can suit your needs.

In order to make money you have to take some form of risk otherwise you will never be able to grow your wealth.

This blog post will explore these investment options and what they involve so that you can make more informed decisions on where to put your money.

Mutual funds

Mutual funds are investment vehicles that pool together money from investors to provide more capital for investing in stocks, bonds or other securities also known as money markets funds. They also lend money to solid companies with solid cash flows who need money for short periods of time.

Mutual fund companies purchase a set number of shares in individual stocks and then divide the profits among their shareholders based on how many shares they own.

You can buy mutual funds directly by purchasing them through a broker.

Fund managers in Kenya are not allowed by law to invest more than 25% of their capital on one single investment.This is what makes investments safe.

In mutual funds,returns are calculated daily. The average rate of return for mutual funds in Kenya is between 9% to 10%.

They are usually taxed a withholding tax of 15%, as all interest earning opportunities are taxed at this rate.

Benefits of investing in a mutual fund

  • You can withdraw your money after giving a notice of 2 to 3 days.
  • High interest rate compared to other savings method such as fixed deposit.The average savings rate is 4.1 % per annum while of a money market fund is about 9 %.
  • You can use mutual funds to save for emergencies while earning interest on it.
  • You can use mutual funds to save for unforeseen projects as you can withdraw any time.
  • They are safe investments as they are regulated by the capital markets authority with is responsible for making sure fund managers are consistently doing the right thing.
  • You can start investing with very little capital the minimum being Ksh 1,000.

How to know which companies to invest with

  • Check if it is a solid company and if its run by people who understand investments.
  • Check their rate of return of investment.If the return is way higher ,investigate where the company invests their money.The higher the return, the higher the risk. If the return is less than the current rate of treasury bills ,then consider investing in treasury bills instead.
  • They should be transparent in all their dealings.Ask for a document called a fact sheet which outlines their company profile, their current return,their past performance and where they invests their money.
  • Confirm their management fees .The current market rate of management fees is between 1% to 3%.
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Some of the reputable companies in Kenya that you can invest through in mutual funds are;

  • Britam
  • Sanlam
  • Cic Insurance
  • Amana capital
  • Nabo capital
  • Old mutual
  • Zimele capital
  • ICEA
  • Stanlib


The stock market is the most common form of investing in Kenya and comes with many risks–but there are many rewards as well. Stocks are shares in the company that you purchase and, as a result, your money goes into its operations.

Investing in stocks will not guarantee success but it’s how many people make their living,some of which have become billionaires through investing.

Please note that stock prices can fluctuate depending on economic conditions or what is happening in Kenya so they’re unpredictable by definition.

When you invest in stocks ,you are bound to receive dividends as part of the company’s profits in addition to your initial investment.

If you’re interested in stocks but don’t know where to start, read my blog post on how to invest in shares in Kenya and get insights on the step by step process of investing in stocks.

Unit trust

This is a type of mutual fund that pools money from many investors to invest in stocks, bonds and other securities.

The difference between a unit trust and a mutual fund is that a unit trust is established under a trust deed and the investor is the beneficiary.

The return of investment of a unit trust is calculated by the net asset value of units at a given point in time, divided by the company’s number of units.

This is usually quoted as an annual percentage rate and can vary from one unit trust to another depending on how well it has performed over its lifetime.

Private equity

This entails buying shares in small, privately-held companies that are not listed on the stock market.

The risk associated with this is high because you may lose your entire investment if the company goes into liquidation and there’s no guarantee of any return.

There are various ways to provide a degree of protection for private equity investments such as; diversifying your portfolio of assets,spreading your investment over different fund managers and investing in an NSE index-linked product.

Private equity funds are managed by professional fund management companies like Zimele that invest for clients through pools of capital from people like you.

Treasury Bills

The Treasury Bills market is an important one to understand if you’re looking for safe and stable investment opportunities as it offers good liquidity, no lock-in periods and attractive returns.

In Kenya, treasury bills are issued by the Central Bank of Kenya with maturities ranging from 91 days to 364 days.

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Treasury bills offer a safe way for you to invest in Kenyan financial markets and make attractive returns at low risk rates.

The average interest rate range from 7% to 10% . The interest rate is determined through auction – so if there’s more demand than supply , it will be higher and vice versa.

If the treasury bills mature before they’re due for reinvestment , you can reinvest the maturing amount in a new set of treasury bills.

Below is the step by step process of investing in treasury bills in Kenya

Open a CDS account

  1. Visit Central Bank and fill in an application form.
  2. Take it to your bank for the bank to certify that the correct bank information has been filled in.
  3. Take the form back to Central Bank with your passport photo.Do not affix the photo to the form till Central bank sees it and signs it at the back to confirm you are the one in the photo.
  4. After 2 weeks Central Bank will send you the CDS account number .
  5. Once you get the CDS account number download the stockbroker form and fill the stockbroker of choice.

Analyze the treasury bills

Decide on the treasury bills you want to invest in.Treasury bills are grouped according to the maturity period.There is 91 day,182 days and 365 days treasury bill.The longer the period the higher the interest

Fill a treasury bill application form

You will need to fill a treasury bill application form for every treasury bill you want to purchase. The application forms are available in Central Bank.

Purchase treasury bills

The minimum investment is Ksh 100,000 and should be purchased in denominations of Ksh 50,000. When buying treasury bills ,you buy them less the interest you will get.

Upon maturity you will be granted the whole amount you would have invested. This means that you get the interest upfront. For example if the interest of a treasury bill is 8% ,you should invest Ksh 92,000. When the T-bill matures you will get Ksh 100,000.

Keep track of your portfolio

The interest is calculated on daily basis so it’s advisable that you keep an eye on these transactions by checking them online or contacting the customer care of the bank that you purchased the treasury bills from for assistance.

Receive your payment

Once the treasury bill has matured, you will receive your payment in your bank account.You can choose to reinvest to increase your earnings.

Treasury Bonds

This is another investment vehicle that you can invest in Kenya. A bond is an agreement between the lender and the borrower.

Types of bonds

There are two types of bonds

  • Corporate bonds
  • Government bonds
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Corporate bonds

This is where a company borrows money from the public for the purposes of expansion or running its daily operations.

Government bonds

This is a type of security where the government borrows money from public.These securities have a specific maturity date and interest rate.

This is one of the ways through which governments raise money from investors for their budget or development projects such as building roads, hospitals etc .

Investing in treasury bonds is less risky than investing in stocks because they offer better protection against economic downturns as the government will be able to pay back their bondholders even if other investments fail.

The government bond is further divided into two;

FXT bonds-This type of bonds are taxed.Bonds between 2-10 years are taxed at a rate of 15% withholding tax while bonds of more than 10 years are taxed at a rate of 10%.

Infrastructure bonds-This are bonds that are issued by the government for specific infrastructure projects.They are tax free.

The process of investing in treasury bonds is the same as the treasury bills.

The difference between treasury bills and treasury bonds is that treasury bills are short term while bonds have a longer duration.Treasury bills are normally a year or less.

What to look out for when buying bonds

The duration of the bonds e.g 10 ,15,20,25,30 year bond

The rate of return –Different bonds have different interests rate,

The tax component-Infrastructure bonds have 0% tax rate,while 2-10 year have 15 % tax rate and above 15 have a 10% tax rate

You can purchase bonds in two different ways;

Primary auction-This are directly issued by the government.

Secondary auction-This is when buy them from a seller who had initially purchased the bonds from primary auction.

The minimum amount you can invest in bonds in Ksh 100,000.Then you can add them in lots of Ksh 50,000.


Saccos are a major investment vehicle among Kenyans because of the high returns and its reliability.

Once you join a Sacco,you are entitled to receive dividends on your shares and interests on your deposits or savings.

Most saccos in Kenya offer a rate of 8% to 10% as interest on deposits and between 15% to 22 % as dividends on shares.

Read my blog post on the best sacco to join to get insights on the best performing saccos you can invest in, here in Kenya.


Kenya has a variety of investment options from treasury bills, bonds and saccos which can suit any investor’s needs.

If you’re not sure about what Kenyan investment vehicle would best suit your needs, contact your financial advisor to get advice on what you should invest in.

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