By Mary Anne Zita,
As you continue to save money for your Chama, I am sure that you have a bank account with a certain bank where you put money for the Chama. Chances are the account is either a savings account or a current account. Whilst your money is secure sitting in the account, ask yourselves, how much are we making? Sometimes this money sits there for close to a year as you plan to accumulate funds to reach your goals to either take a loan or invest in something. Why not put that money in a fixed deposit account instead?
A fixed deposit is a lump sum of money deposited in a bank for a fixed amount of time at a fixed interest rate. The deposited money cannot be withdrawn until the maturity of the deposit. It is one of the safer investment products when compared with shares and other investment vehicles.
This type of investment can work very well if you are Chama that is just starting out in your investment career. It makes sense to start off with secure investments such as a fixed deposit account and as you grow you can venture into riskier investment vehicles. Whilst this may not give you very high returns, it is a secure investment and it works well for a Chama that is still young and members are still getting to know each other and building trust.
Also, this prevents members of the Chama from spending the money before it can be used for its purpose. Having money readily available in the bank account sometimes tempts members of the Chama to withdraw it and use it on something else. However, when it is in a fixed account, you cannot touch it thus it can later be used for the right purpose and gives you discipline as a Chama to save.
Especially for those chamas that don’t have any concrete plans for the money, it sure is a great way to invest. Additionally, for chamas that don’t believe in high-risk investments, it is better to have a fixed deposit.
And, with the Century Fixed Deposit, you can earn the HIGHEST interest rates in Kenya; a guaranteed 10.5% interest on deposits from Kshs. 50,000.
So, get your Chama friends together and invest in a fixed deposit and relax knowing that your investments are in safe hands.
This article was originally published in Chama Soft.