EDITOR’S NOTE: This article is part of our Money254 Partner Series produced in partnership with Absa Bank Kenya to celebrate the launch of their new digital savings account. For more on Absa’s new digital savings account, read here.
We all want to achieve financial freedom and one of the surest ways to get there is by making savings.
Saving often seems like a simple exercise but for some people, it is not and can be painfully elusive. The reason is because we have different personalities, impulses, financial capabilities, different goals, and strategies that impact our savings journey.
While different approaches work for different people, there are certain conventions that are encouraged, one of them being having an account dedicated to your savings.
Personal financial experts, and testimonials from the most successful savers also point out the need to have automated savings so that you do not have to actively think about how much to save after the money hits your account.
Additionally, tracking your savings and expenditure is yet another recommended convention on the road to firming up your savings.
Given these three main facilitators of a great savings habit, there are many saving accounts and products options that you can use to keep your money, depending on your needs.
This article explains the Absa Digital Savings Account - one of the pioneer digital savings innovations in Kenya - how to open and operate it, and how it helps ease your savings journey.
As the name suggests the Absa Digital Savings Account is digital in nature, which separates it from the traditional savings accounts in a number of ways.
Firstly, the account can be opened digitally, without the requirement to visit and branch and queue for tedious paperwork.
Once you are ready to open the account, you simply kick off this 10-minute journey here.
The link will take you to the Absa website where you can begin your journey to a whole new way of saving.
You will land on a “how it works” section that gives you a brief of how the Absa Digital Saving Account works. Below, click on “Apply Online”.
If you are using a computer or tablet, this option will be on the left hand side of the screen.
After reading an introduction to the application process, click on the “Apply Now” button.
Please note that for the application, the Internet Explorer 11 browser does not support this application - if you happen to have this particular browser, you will need to instal an alternative browser such as:
Once you have clicked “Apply Now”, you will be redirected to a new page where your personal details will be recorded
If you have opened a bank account before, you are probably aware of the basic KYC documents that are required under Kenyan law. Providing this information is a mandatory legal requirement when opening any bank account.
Here you can provide any of the following identification documents:
You will also fill out your email address and mobile phone number. You then press “Continue” to proceed to the next step.
You will then get a one-time verification code to confirm your mobile phone number. The OTP is sent as an SMS to the mobile phone number used to register your account.
The system autofills your name, based on the identification document number provided in the previous page.
On this page, you confirm your title and nationality. The next step is to fill two declarations in line with international banking regulations including the Foreign Account Tax Compliance Act (FATCA) and Common Reporting Standard (CRS).
This part also requires you to fill residential address details including your estate/street name, country of residence, and postal address/code.
A digital savings account can be set up online without needing to visit a branch. Absa Bank has a newly-launched digital savings account that would interest you.
Next, fill out your employment details including employment status, the name of employer and their contacts, as well as income and income sources. Your KRA PIN is also required for purposes of complying with the Kenyan banking law.
After clicking “Continue” the next step is to provide a copy of your Identification Card which is uploaded in any of the following formats:
You will also be required to upload a specimen of your signature, which ensures that access to your account is highly secured.
The specimen signature should be signed against a white background. It is advisable to have it clearly visible and crop out most of the areas outside the signature. The signature should be uploaded in the JPEG or JPG format.
For ease of the application process, it is also advisable to ensure the uploaded documents are not bigger than 2MB and are not older than three months.
The next step is the image verification where you will be guided to have a photo of your face recorded. The photo is taken through your camera on your phone or your personal computer, depending on the device you are using.
For ease of the process, please ensure your eyes are not closed and there is no motion as the photo is being taken.
This is the last stage of this digital application process. At the left top corner of your screen (mobile), there is a reference number shared, which you should keep for future reference. It is also sent to your phone number and can help track the progress of your account opening process.
Opening the Absa Digital Savings Account sets you up for a journey of many possibilities with regard to how you save and track your finances.
The first feature of the Absa Digital Savings Account is automation, which allows you to keep saving without necessarily having to think about updating your savings.
As human beings, we have many things that clog our minds, we are prone to forgetfulness and impulses. Even when we may want to save, trusting our memory and the discipline to send savings to an account is not always easy.
Thus, financial experts recommend automation so that your savings are automatically deducted and kept in a savings account at a specific day of the month.
This can be done through a standing order to your salary account or a request to your employer to send a specific amount to your Absa Digital Savings Account, when paying your salary.
If you are in business, you can make the standing order through your main business account. This will allow a regular deduction of the amount you wish to save at a specific day of the month, even when memory fails you.
If you have a client or clients who make regular payments, say rental payments, another alternative is to ask the channel the money via the digital savings account.
There are certain times when you may need to quickly access your savings and the benefit with the Absa Digital Savings Account is that you can access the funds as quickly as you need them.
It could be that you have achieved the goal you were saving for, or you have an emergency, such as a medical bill, or anything that requires you to make a withdrawal that you had not planned for.
As such some of the great factors that enhance the ease of access to your savings include:
This makes the Absa Digital Savings Account one of the top places to consider keeping your emergency savings since the savings accounts gives you the true liquidity that is required for an emergency fund.
You don’t want to be making frantic calls at a hospital lobby because you have to wait 48 hours to withdraw from your Money Market Fund (MMF) or you just realised that Saccos require a 2-month notice to withdraw savings.
For emergencies, the savings account does seem to offer the biggest benefit. Quick access to your money when you need it.
The beauty with a great savings habit is that you are always looking for new areas to save, even when your income is stagnant.
Once you have the Absa Digital Savings Account, you can track your general expenditure and identify areas where you can spare an extra shilling, either from your basic needs budget or in the discretionary spending.
Via the Absa App, you can track your saving history as far as several years back, you can tell which standing orders or direct debits are about to expire, make sure your employer is actually depositing to your digital savings account (if you have this arrangement), track your withdrawals and so much more so you can improve how you save.
Tracking comes with a number of benefits including:
One of the advantages of having a digital savings account is that it becomes much easier to access your account, check balances, withdraw, or transfer funds.
If you are travelling or working outside the country, this feature may particularly be beneficial in your savings journey.
Some Kenyans in the diaspora have in the past had challenges with making savings in Kenya - often losing their hard-earned remittances to duplicitous friends and relatives.
The Absa Digital Savings Account offers one of the highest rates of return for a bank savings account in Kenya.
At a 9% maximum annual interest rate, this is among the highest among savings accounts.
A Money254 review of interest rates offered by commercial banks on savings shows banks offer between just 1% and 9% in annual interest to their savers.
Considering the ease of access to your money, Absa Digital Account's interest rate also compares well to other financial products such as Money Market Funds (MMFs) and Saccos.
Some Saccos and MMFs may have higher interest rates, but they also have low accessibility at 48 hours and 60 days, respectively.
The interest rate for the Absa Digital Savings Account is paid monthly. This comes with the advantage of compounded interest.
For example, if you open your account in April, your savings will earn an interest that will be paid out at the end of May. This interest is then going to be added to the principal amount and that new amount will earn interest every month. Meaning the interest will earn more interest - and so on.
The standard rate for the Absa Digital Savings Account is 9%.
This high interest is important in motivating you to remain committed to your savings goal.
Time to sign up for the Absa Digital Savings Account? Click here to begin!