What is an investment account?
An investment account is a financial account used to invest in securities such as stocks, bonds, mutual funds, and exchange-traded funds (ETFs). You can open an account with financial institutions such as banks, brokerages, or investment firms.
Opening an investment account has the potential for long-term growth and wealth accumulation. However, investing comes with risks. Thus it is important to consider your investment goal and risk tolerance.
Investment accounts include:
Money Market Fund Account
Money market funds are a type of mutual fund that invests in short-term, low-risk securities such as government bonds, treasury bills, and commercial papers.
The primary objective of a money market fund is to provide you with a relatively safe and stable return on your investment. It also provides liquidity and easy access to your money. Money market funds in Kenya have a minimum investment amount and a management fee, which is charged as a percentage of the total assets under management.
It is important to note that money market funds, like all investments, come with a certain level of risk. While money market funds are generally considered to be low-risk investments, there is always the possibility of losing some or all of your investment. It is always a good idea to consult with a financial advisor or do your own research before investing in any financial product.
A Sacco Account
This is a savings account offered by savings and credit cooperative organizations. Saccos are member-owned financial cooperatives that provide a range of financial services including savings accounts, loans, insurance, and investment products.
As a member, you are required to save money on a regular basis for instance monthly. Funds deposited into the Sacco account provide loans to members with lower interest rates compared to banks.
Sacco accounts offer other benefits such as dividends on savings, access to insurance products, and access to financial education and counseling. Members of Saccos also have a say in the management and governance of the organization, as they elect the board of directors and vote on important decisions.
A bond fund Account
A bond fund account in Kenya is a type of investment account that invests primarily in fixed-income securities such as government bonds, corporate bonds, and other debt securities. Bond funds pool money from multiple investors to buy a diversified portfolio of bonds, providing individual investors with access to a range of fixed-income securities that they may not be able to buy on their own.
Bond funds in Kenya are managed by banks, investment firms, and other financial institutions. These funds typically generate income for investors through regular interest payments from the underlying bond investments, as well as capital appreciation if the value of the bonds in the fund increases.
The minimum investment amount is ksh 5,000