Risk is one of the key factors to check when investing. As an investor, you need to understand your risk tolerance. Hence, this article is all about risk-free investments that you can do in Kenya.

For most beginners, it is best to start with those investment options that have low-risk levels. This allows you to keep your capital safe as you learn the market. However, due to this element, these investments tend to have lower returns compared to high-risk ones.

Risk management is also a key strategy you need when investing. As you advance as an investor, it is advisable to combine both risk-free and risky investment options.  

Hence, below are some of the risk-free investments that you can do in Kenya.

1. Government bonds

I opt to start with this option because it is among the safest investment options in the market. It also comes with highly guaranteed returns that could be tax-free.

Governments regularly issue various securities to raise money. This could be either on a weekly or a monthly basis. The process of investing in government securities is straightforward.

You only need a CBK-CDS account and capital to start bidding. Government securities have a fixed interest and duration. Normally, the government pays interest half yearly and the principal at the expiry of the bond tenor.

The reason why it is risk-free is that it is almost impossible for the government to default. Hence, you will always get your investment back.

2. Fixed deposit investment

This is an investment option offered by financial institutions such as banks and saccos. It entails putting your money with a bank for a fixed duration at an agreed interest rate.

Due to the stable nature of these institutions, it is almost impossible for them to default making this investment risk-free.

Here is a detailed breakdown of how to invest in fixed deposits. You only need to have an account to start this process.

For this type of investment, you can only access your funds at the expiry of the fixing timeline. However, you can also choose to liquidate your deposit before maturity but at a cost of foregoing the interest earned.

3. Sacco Investment

Saccos are great investment options to consider due to their prominence and accessibility in the country. The Sacco movement is continuously expanding both in products and location.

One of the most common investment options offered by saccos is share deposits. This allows you to save with the Sacco and in return earn dividends yearly. Best dividend-paying saccos in Kenya.

The yearly returns and little risk offered by saccos have made them a key investment choice for most Kenyans. To invest with a Sacco, you need to register as a member and start making monthly contributions of at least 1000 shillings.

Different saccos pay different dividend rates. Hence, it is a fundamental requirement to perform market research when choosing the right Sacco. This will ensure you settle on the one offering the best returns.

Normally, if you want to liquidate your deposits from the Sacco, you should give a notice of at least 2 months. A key control measure to prevent easy access to your savings.

4. Real estate investment

Real estate is currently a highly lucrative investment industry in Kenya. The demand for both land and housing is insatiable making it a magnet for investors.

Due to this demand, you are almost guaranteed to make a return on your investment. If your capital is limited, you can opt to invest in upcoming areas where land prices are not as high.

However, this demand has also attracted a lot of fraudsters in this sector making it necessary to carry out adequate diligence. Here are some of the factors you should consider when buying land in Kenya.

In conclusion, below is a recap of some risk-free investments that you can do in Kenya.

  1. Government bonds
  2. Fixed deposits
  3. Sacco investment
  4. Real estate investment


Leave a Reply

Your email address will not be published. Required fields are marked *