Thursday, January 26, 2006

Who wants to save?

I have been seriously shopping for a Bank because the account i have with Co-operative Bank of Kenya is a student account.Not that i am complaining about it considering

NO LEDGER FEES

So what is my problem. My bank (Co-operative Bank of Kenya)has this habit of letting me down anytime i am in serious need of money. Their ATMS are a disaster sometimes. And that sometimes is when i need my money most!.I have talked to ATM'S,prayed by their sides,asked God why He has decided to abandon me and quite frankly, I am tired!

So in my shopping i went around calling the Banks stating my current Employer's name to ensure i got first hand information.

Standard Chartered Bank
Safari Account
More than 10M- 5.5% interest
Below 100,000(which is where i squarely belong)- 2.5%
I felt a sense of loss.

Savings Account
A minimum balance of Ksh.30,000
For less than 50k- ledger fee of Ksh 350
Below 30k-Ksh. 450
Below 10k- Ksh.650

Barclays
Savings Account
Minimum Balance of Ksh.50,000
The ledger fees were something on the up of Ksh. 600 per month (which i won't pay)

Those were the only banks i was shopping for. I am a disappointed customer to be of the major banks in Kenya.The rest of the banks (Equity, KCB et al) won't help me as i am sure they are worse than what i already have.

I have however found a very interesting profitable way to save (I am a Kikuyu) and my money has to earn interest not several deductions. Why should i put Ksh. 50,000 in a bank to give me 2.5%? And when they lend me their money they charge me obscene figures like (38%)?

Banks in Kenya do not even appreciate Symbiosis as a principle of life. You scratch my back,i scratch yours harder. You give me 12% and above, i might just borrow at 14%. They truth is they won't.

I then started shopping around for mutual funds. I tell you ignorance is not bliss my dear friends.

Zimele Asset Management is currently giving a 8.5% for their Money Market. You can even save from Ksh.2,000

African Alliance (their lack of website bothers me a lot) is yielding basically the sameinterest for their shilling fund around (8%)They have funds ranging from 10,000 to Ksh. 100,000.

Old Mutual has different rates for persons who have invested in their funds depending on the period of time.
Though their minimum investment is Ksh. 500,000, they also have a different arrangement for persons who can afford at least Ksh. 5,000 bob every month to build up to half a million bob.

Madison Insurance have a policy called SMART INVESTOR to which they give interest of 12.5% and above. Premiums range from Ksh. 3,000 bob for a month and the policy is quite flexible.

So why does a bank think i will save with them. I have decided to maintain my free student account (for expenditure purposes) and save wisely.

Read The Richest Man in Babylon-George S. Clanson
My friend Wangu gave it to me to read; it is a classic! I was even considering giving it a review. Tiny but worth it.

15 comments:

  1. My woes with banks are plenty but since I cannot hide money under the matress unleashing as I need it I ended up with StanChart.
    No problem with their services, ATMs but woe unto you if you have to do anything over the counter. The lines are crazy.
    Then every single time you withdraw YOUR OWN money you are charged KES 25 nini hii?

    I have friends at Co-Op and we make fun of them as the farmers bank. The lines are so long; the farmers are budgetting inside the ATM as they withdraw money.

    All the best. Those deals for Mutual funds are a plot. Do not make a bank richer than absolutely necessary.

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  2. Aki and the way am having a problem looking for a bank to weka my chums in jamu. saving abroad is a long chore that i can do without the temptation of using up my money.

    ebu help a sista out!

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  3. the banking industry in kenya doesn't sound too good. poleni. sounds to me like a struggling person (which is pretty much most of the kenyans) can't really save much considering the fact that there's even no incentive to open a savings account. sad...

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  4. Banking in kenya is a nightmare

    i have never understood all the charges guys put up with,the fact that atm cards and debt cards are not visa issued, why people are categorized by amounts instead of financial goals,
    i have never understood why the bank wants to know where your money came from ( my bank here in the states has never asked me )and when our leaders steal our money this same european bank dpnt ask them where the money came from or refuse to bank it .
    i cant understand how in the world we live in online banking is still a rumour in kenya,
    i dont understand how came nobody in a kenyan bank smiles at you untill they see ur account balance .

    and finally i can understand how a kenyan living in the states would want to bank in a kenyan bank when you can bank here and have access to your money in kenya or anywhere in the world

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  5. oooh and i cant understand why u would bank in barclays when equity (muiganania) is right across the street-maybe only poor afarmers like me wonder

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  6. @Joe, to be frank i am looking for a bank i can trust to get my money any time i want (Equity is not one of them)I cant trust their ATMs

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  7. Shi, Hi.
    Thanks for that post.I keep telling myself that I need to save but I’m always too lazy?? to do it, ama kusema the truth, pesa has gone to shoes, scents and carnivore dawas!
    Aki I suck! I need help…and I’m guessing you knowwhattamsaying.
    So yes, I will fuatilia those mutual bonds and things, although I always think they are out to get you!! The kikuyu specimen in my hybrid self. I have some few random shares though…I think that is a very good way to invest…
    About banks, I use Move...NIC. It’s pretty ok. 800 a month for everything you will ever do, including salary processing etc. Tihihi! I also have my KCB student’s account where I TRY to save on, although when things get thick, I always fagia it dry. Tsk tsk! Sad....Thanks for that post.

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  8. @Shiroh
    Nice post. Really don't get the ledger fees stuff - Barclays of all banks! I think pple should vote with their feet n move banks but will it happen? oooh, That book seems like a good read -thanks.

    @Mocha
    I see you gal, how'z it going?

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  9. You guys think you have it bad?? Try opening a bank account in the UK.. the bureaucracy is unbelievable!! at least the good thing is once you are in you are in, Plus, now the banks don't charge you for using another banks ATM which is v. good. By the way, do you know why the Swiss people are so rich?? coz their banks offer the best service! Opening one was so easy.. I simply walked in with my permit and walked out with an account...and i didn't even need a minimum balance. Well thanks so much for the info shiroh, i will read the book and look into those funds :)

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  10. that is some very sound advice to be kept in mind.. thanks! :-)

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  11. Good Luck: am wit Barclays so far no complaints but there minimum balance is now 20,000 with no over the counter fees or ATM withdrawal fees. Am not so sure bout ledger fees..but technically banks are there to keep ur money for convenience not for interest..if ur thinking investment i'd go for old mutual

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  12. He he! Nyinyi watu wa student accounts -- 3 of my buddies have finally been busted. They tried to withdraw their money and were told that there was no money TO withdraw.

    Nothing moves faster than a person who'se ATM tells him "Pesa zako hazipatikani kwa sasa".

    As for banks -- i've not had too many problems with barclays. Ignore the brochures. Go there physically and handa one of those account executives. They have very many products for very different needs.

    And that guy who was talking about Equity -- I have some friends who works there. Suffice it to say I wouldn't touch it with a barge pole.

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  13. @Prous-lol at co-op being a farmers bank
    @Mocha, you can bank as long as you have enough to maintain their minimum
    @cute_angel, not good for a poor man like me
    @joe, not really a nightmare, just oppressive. Now they are even asking for utility bills to verify if you are giving correct address
    @Nick, the money that those guys make with your money is obnoxious, so why not give you some interest? Think about it
    @S! sound thanks, how you doing lakini?
    @KM, saving is critical a necessity. That is the problem with the student account you fagia it dry all the time
    @Kenyangal, sure you need to read the book
    @M, i dread that day you are talking about it. If you bet on Barclays then i will try.

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  14. I dont even know why you would consider giving your money to them foreign banks, they treat you like crap and you pay them for this???!?!?!
    When i left the States I upgraded my Bakilay (Barclays) from child account to regular, took me 2 months NOT to get an ATM card, so i upgraded to Prestige which charge you an arm and a leg for better services and longer banking hours (5pm) waited another 2 months NOT to get an ATM, so I looked at them charges of Stanchart, Stanbic et al. said to hell with that and joined Co-op, had the same issues as you of atm card being swallowed, declined in restaurants, bars etc knowing full well theres money in the account. At which point i listened to my ol lady and joined KCB, 2 years down the road i am one very happy camper. trust me in 3 years they shall be the biggest bank in Kenya, as kina bakilay and co funga branches.

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  15. Great blog. Found your blog while searching for more information at yahoo about this post . Your blog has quite a lot of interesting thoughts. Keep up the good work, Shiroh.

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