My Best Decision in 2023 Was Keeping My Money in the Umba Fixed Deposit Account

EDITOR’S NOTE: This article is part of our Money254 Partner Series produced in partnership with Umba to celebrate the launch of their fixed deposit savings account.

2024 is only a few days away. It is the perfect time for me to reflect on my experiences in 2023 and wueh! It has been a tough year. 

I closed the year 2022 jobless. Previously, I had a good job which allowed me to make a few investments here and there. I bought a piece of land in Kisaju which I am yet to develop, but it's slowly gaining value. 

I had a side hustle business rearing cows in my home village in Kiambu. My parents were helping me manage the business because it is quite hands-on. 

Things started going south in October 2022 when our salaries were delayed for two weeks. In November, not even a cent hit our accounts. A few employees approached management to understand what was happening. The conversation resulted in management issuing all of us with a letter to submit to our landlords. 

“To whom it may concern,” the reference read. “This is to notify you that the person whose name appears above is an employee of —Ltd Company. The company’s November salary has not been processed but arrangements are being made to clear the balances within the next two weeks. Please bear with them,” it continued. 

Things Get Worse

Two weeks later, we were called for a town hall meeting, or what Kenyans refer to as a Kamukunji. We were expecting some good news but instead, we were informed that the company would be shutting down, effective immediately. 

I count myself lucky because I had an emergency fund that was enough to cover my regular expenses for at least 6 months. Despite this cushion, you can understand when I tell you that I had an unpleasant Christmas experience. I wasn't so much concerned about the present since I had a comfortable legroom - but the future seemed uncertain, considering I was raising my son, Kyle, as a single mother. 

In January, my son and I returned to our city apartment after spending two weeks in my parent’s home. I had one goal, to aggressively look for income, both in the form of pursuing a business and looking for new employment opportunities. 

My morning routine would start at 6 am. After preparing Kyle for school, I would scroll job sites and make at least 5 applications, every morning without fail. I would use the rest of the day to take free online courses just to keep myself busy. 

They say when it rains, it pours. Other than my emergency fund, my only other source of income was the dairy cows which my parents were helping me nurture.

A few weeks into January 2023, one of the biggest challenges we started experiencing was a shortage in pasture. There was a national drought, which often necessitated buying pasture from other farmers - sometimes tens of kilometres away. This had the unpleasant effect of increasing costs - at a time when I was surviving on a very thin thread. 

My Beloved Cows Gone

Then the cows started getting sick due to interruptions in their routine meal. By March, the cows had become a big financial burden, now threatening my emergency fund because of the frequent deductions to support the dairy business. 

I made a quick decision to sell them, although they fetched slightly less that the fair price. I sold them in mid March for Ksh250,000 - although they would have fetched over Ksh300,000 if it were not for the drought. 

Not so long after I sold them, I got an email from one of the many companies where I had attended an interview. The conversation ended with good news, I was offered a new job. On Monday, April 3, 2023, I checked in for my new job - a bigger title and higher pay than the previous one. I was elated!

As my financial situation improved, my first task was to top up the emergency fund which had taken a beating after the job loss. This I did using the money I had received after selling my dairy cows. I also went back to my monthly savings, keeping aside at least Ksh40,000 every month. 

By September this year, I had accumulated Ksh250,000 - separate from my emergency fund which I do not touch. Ever heard of the phrase has this life no balance?

It is indeed a reality of life because my problem now became how to utilise this money. The high cost of living and the fact that I had been jobless just a few months ago was a cause for anxiety. I did not want to miss any opportunity in wealth creation. 

My first thought had been to go back to dairy farming, having already been familiar with the business. However, my new job was quite time-consuming and I would not be in a position to support my parents as I had done in the past. 

It was around this time that I attended a seminar on wealth creation. The speaker was a huge proponent of passive income as a strategy to grow wealth - particularly during the hard economic times like we are in today. 

Passive income involves generating income without having to actively seek it. My landlord, for example, does not have to be involved in the day to day management of the apartment block, but every month he receives rental income.

A Solution to My Problems

I did research and talked to my mentors to understand the various passive income opportunities available. The options given included rental income, shares in listed companies, Money Market Funds, fixed deposit accounts, government securities, among others. 

I researched the various options that were available for each passive income vehicle. This is how I learnt about the Umba Fixed Deposit Account.

Umba is a digital bank that is licensed by the Central Bank of Kenya. It attracted my attention because it had the highest interest rate among the fixed deposit options I had read about - 16% per annum. 

I settled on the Umba Fixed Deposit Account after factoring in some of my other considerations which included: 

• The Umba Fixed Deposit offers assured earnings. I know how much my locked deposits would earn on which dates. Most of the other investment vehicles had fluctuating interest rates that were dependent on external factors. 

• The Umba Fixed Deposit offers several high-interest lock options that can guarantee liquidity. The 16% interest option required me to lock my money for at least 12 months. However, I could also lock them for 9 months at 15% p.a, for 6 months at 14% p.a, for 3 months at 13% p.a, and even for a month at 12% per annum. 

• The Umba Fixed Deposit Account offers me peace of mind knowing that the bank’s operations are regulated by the Central Bank of Kenya and as per Kenya law, my deposits are insured by the Kenya Deposit Insurance Corporation (KDIC). 

• The Umba Fixed Deposit account is easy to open and maintain. It took me less than ten minutes to set it up on my smartphone and with the same flexibility, I was able to move my savings into the Umba Fixed Deposit account where I can view the balances including interest earned. 

This is how I joined the club of passive income earners in Kenya. I consider this to be my biggest achievement in 2023 because even as I work hard in this job that I am so grateful to give, I know the money that I worked for is also working for me. 

Next year, on October 29, my deposit will mature and my Ksh250,000 will earn me Ksh40,000 in interest. I plan on building my savings until I have enough to develop my plot in Kisaju. 

Since my calculations show I will have saved another Ksh350,000 by October, my next fixed deposit will be Ksh650,000 which will earn me Ksh104,000 in 2025 - when I plan to start building.

Would you like to join me in growing your wealth through the Umba Fixed Deposit? Start your journey HERE.