“I'm in My First Job But Already Have 3 Bank Accounts - Which Do I Get Paid Into?”

EDITOR'S NOTE: This article is a part of our Money254 Partner series and is produced in partnership with Absa Bank Kenya . For more on Money254’s editorial policy, read here.

Remember when you opened your first bank account? You had probably just turned 18, either needed an account for your HELB loan to be deposited into, had a hustle that paid by bank, or you just needed to feel like a proper adult with a bank account.

Whichever way, like  most of us, our first bank accounts may not have taken much thought. When we asked some of our colleagues in the office about how they  opened their very first bank accounts, three things came out;

• The majority opened their first bank account the year following the end of their secondary school education.
• The choice of which bank to open an account with was determined by relatives - especially parents, friends or colleagues in their first jobs.
• Others say they opened an account with the branch that was close to their hometown, solely because that was the only bank that was opened on the day they needed a bank account.

By the time most Kenyans start their first job after college, typically at around the age of 23 or thereabout, it is not uncommon for one to have at least one or two extra bank accounts that may mostly be idle. 

Perhaps the HELB loan was being processed faster by a certain bank and you switched there, or you landed a part-time job requiring you to open an account with a specific bank or as someone told us, you opened an account to help out a friend contracted in a sales job at a bank to meet their monthly quota of new customers acquired. 

However, as you settle into a stable income, have your career goals lined up and the need for prudent financial planning sets in as responsibilities start creeping up on you, it becomes necessary to have one main current account that helps you to organise your finances. 

With time, you also  realise that keeping current accounts that are dormant open is actually not such a great idea since;

• Some banks may continue charging you monthly fees on your current account that may pile up to a consequential figure.
• There is a risk of fraud such as identity theft, breach of personal information, etc.
• The money that may be remaining in that idle account is actually losing value. Even if you are treating it as savings, you are better off opting for  savings accounts that offer interest, such as the Absa Digital Savings Account that comes with 9% interest per annum compounded monthly. 

Check Out the Absa Digital Savings Account Interest Calculator Here

Landing your first job can be liberating in many ways. You finally have your own income, and you can determine how to spend it and plan for your future. 

But like everything in life, freedom comes with increased responsibility and among the first areas to take ownership is in how you access your salary and maximising the benefits of consistent income with the right banking partner. 

Why You Need a Great Current Account 

Given the variety of current accounts offered by commercial banks, microfinance banks, and Saccos, it can be overwhelming when deciding which one works best for you and which ones to avoid. In fact, it may feel like any bank account is just an okay choice, but this is not the case as this article will demonstrate. 

Here, we highlight some of the features to look out for in picking a bank account that will allow you to realise optimal control of your finances, as well as the importance of these features as you start your journey to financial success. 

Ease of Access

Different bank accounts have varying levels of accessibility. You work hard for your money, so accessing your salary account should also be pretty easy, but this is not always the case. 

You probably have walked around town and witnessed a bank branch with queues  stretching out of the banking hall. It is not uncommon to find customers who take a day off to withdraw their salaries or even do some transactions at a bank branch. 

Picking a banking partner who has invested in technology and resources that allow you easy access to your money cannot be gainsaid. New technologies such as online banking, mobile applications and card services have gone a long way in improving banking experience. 

Moreover, technology is also about people, and a bank that invests in the right personnel to give you that human touch whenever you need a customer service call or get help at the branch - is liberating. 

Financing 

Banking is a lot about relationships. In the early stages of your career, it is prudent to choose a banking partner who is committed to reciprocating and deepening the client-customer relationship. 

You trust the bank with your money, and it is only fair that they also reciprocate in situations where you are in need. This comes in handy as your financial responsibilities increase. You may for instance want to buy a car to ease your commute to work, but you may not have the full amount. 

It could be that you need an overdraft to start a side hustle, or down the road, you may have plans to take a mortgage and settle your family in a nice neighbourhood. It is not only enough to qualify for financing, but the right partner should offer competitive interest rates. 

A committed banking partner is one who foresees these needs and supports you in your personal finance journey. The earlier you start, the deeper a relationship you establish - even for future banking needs that you may not be aware that you need today. 

Security

One of the reasons for keeping your money in an account is to enhance its safety. Thus, it is only natural that you seek a banking partner who is serious about the security of your funds.

There are several advantages that come with banking with an institution that has enhanced security systems:

• You are protected from fraud: This means your identity is protected, and your money is safe from fraudsters because your bank is actively working to block any potential threats. 
• Transact safely: A great banking partner ensures that your transactions are safe such that when you are to send or receive funds, you do not have to worry if the funds will get to the intended recipient. 
• Personal information is protected. Your personal information, especially touching on your finances, is critical and enhanced security systems will ensure you are not getting weird phone calls from unscrupulous individuals who know too much about your banking details.
• Peace of mind: The peace of mind that comes from knowing your money is safe, is priceless. It allows you to focus on working hard to look for more money, and concentrate on other aspects of your life. 

Maintenance Fees and Minimum Balances

Having a current account should not be an expensive or stressful affair. Having an account should help you save money, not increase your expenditure. 

Thus, it is important to choose a current account that does not charge maintenance fees or require you to have a certain minimum balance. This allows you greater freedom in how you spend your money and allows you to save on maintenance costs which can go a long way in preserving your income. 

Nevertheless, you need to make sure that if the account has zero maintenance fees, the fees per transaction do not exceed the maintenance fee. That is, if you are going to be making many transactions per month, you might want to compare the total cost of these transactions with the monthly maintenance fee to decide which one saves you money. 

Investment Facilitation

The best time to start saving and investing is when you are young. It comes with greater flexibility since your responsibilities are still minimal and provides you with the benefit of cushioning your finances from inflation. 

To put it simply, the money you have today is more valuable than the funds you will have two years from now. This is because inflation depletes the value of money over time if it is not invested wisely. Thus, to maximise the potential of your income, look for a banking partner who complements your investment journey. Some of the features that facilitate your investment journey include:

• Standing orders
• Insurance schemes 
• Savings accounts
• Education policies 

Case Study of the Absa One Bank Account

The Absa One current account is one of the most innovative financial products in the Kenyan market. 

The account not only comes with the standard features of a current account, but also allows you to consolidate all your banking needs in the same account. 

Here, you get access to investment products such as the Absa Kenya’s Unit Trust fund, the Absa Digital Savings Account where you can comfortably channel your savings, a multicurrency prepaid card with up to 8 major currencies, discounted personal loans and asset financing, cashback bonuses on debit cards, and access to a credit card, among others. 

As you progress in life, one  of the financial products you will be  interacting with is insurance; from health to motor to education insurance, depending on your needs and those of your loved ones.  

If you are not thinking about insurance and you still say you want to build wealth and possibly retire earlier than the average Kenyan, you need to consider beginning to understand the kind of insurance coverage you need to secure your future. 

And to this end, through the Absa One Current Account, you do not have to worry about dealing with rogue insurance brokers since you have access to all of Absa’s Bancassurance products, including vehicle insurance, life insurance, and medical insurance, among others. These are specially negotiated by Absa for its customers. 

The Absa One Accessibility 

As mentioned at the onset, a great current account is easily accessible and on this, the Absa One account does not disappoint. 

The account offers an innovative self-service digital platform where you can instantly open the bank account and start transacting without necessarily having to visit a physical branch. 

Once your account is set up, you also have various ways of accessing your funds, including the following features:

• Zero maintenance charges
• No minimum balance required
• Integration with Mobile Money platforms (M-PESA and Airtel Money) 
• Access to an Absa cheque book 
• Instant money transfer through PesaLink
• A secure mobile banking app with secure biometric access
• Debit Cards which are instantly issued upon application at an Absa branch
• Credit Cards which are issued upon application at an Absa branch

The Partnership Benefits with Absa One

Opening the Absa One account is the start of a great banking relationship. The bank offers unsecured loans of up to Ksh6 million for personal use and Ksh10 million for business use.

An unsecured loan is a credit facility that is not backed by collateral or any form of security. This means that if you need to borrow money, you will not have to put up any asset as collateral in order to obtain the loan. Instead, Absa Kenya will approve the loan based on your creditworthiness, income, and other factors.

The Absa One account also allows its customers to access asset financing options. What’s more, all these facilities are discounted for Absa customers. 

How Absa One Facilitates Your Savings/Investment Journey

The Absa One current account not only considers your current banking needs, but also the long-term savings and investment options that may benefit you. 

Some of the features that enhance your savings and investment journey if you choose Absa One include:

• A digital savings account with competitive interest rates of 9% per annum, paid quarterly. This is the highest interest rate offered by commercial banks in Kenya today, according to Money254 market research. 
• Access to Absa Unit Trusts with a starting amount of as low as Ksh1,000. 
• Bancassurance: this is a business model where banks and insurance companies collaborate to provide insurance products and services to bank customers. Absa uses this model to allow its customers access discounted insurance solutions that includes life Insurance, education policy, vehicle insurance and premium financing, domestic insurance, medical Insurance, and travel insurance. 
• Access to Absa Connect lifestyle events to help you network. An example is the recent Kenya Magical Kenya Open where Absa was the official Presenting Partner of the international golf tournament.