What is a Kolo?
A lot of us may be familiar with ‘’Kolo’’, a wooden box familiarly shaped like a pig or simply a square box with an opening at the top for saving. Kolo or piggy banks have been around for centuries and have been used by many to save money even to this day.
But is keeping money in a kolo still a good idea?
Well, it depends on what you are saving for and how much money you need to save. Kolos can be a fun way to teach children about saving and can help them develop good financial habits.
However, if you need to save a larger amount of money or are looking to generate returns on your savings, then you may want to look beyond a kolo.
There are better alternatives out there such as opting for investment in Stanbic IBTC Asset Management mutual fund which differs significantly from keeping money in a kolo.
Differences between investing in a mutual fund Vs keeping money in a kolo
1. Returns: Investing in a mutual fund gives you the potential to earn returns on your investment, while a kolo provides no returns as the amount remains the same. Money in your kolo could also lose value.
2. Diversification: Mutual funds invested in a diversified portfolio helps to mitigate risks, unlike a kolo that provides no form of diversification.
3. Liquidity: It is easier to access your money in a kolo since all you need to do is to break it open but may take a little longer for you to access your mutual fund investment, depending on the terms and conditions of the mutual fund. However, you have nothing to worry about withdrawals from your Stanbic IBTC mutual fund investments, as we typically process withdrawal requests in under 24 hours.
4. Safety: Your kolo is highly susceptible to theft, rodents, termites, flood or change in currency policy, however, your mutual fund is safely managed by us as your fund manager, regulated by the Securities and Exchange Commission (‘’SEC’’)
5. Professional Management: A mutual fund is managed by professionals who regularly monitor the market and make investment decisions to try to maximize returns whilst monies in your kolo is not managed thus.
In summary, investing in a mutual fund with Stanbic IBTC Asset Management could potentially provide you with higher returns on your investment compared to a kolo.
However, it is important to understand the risks involved by learning more about the investment option, determining your risk appetite, and consulting with a financial advisor before making any investment decisions.
You can get started with any of our investments by signing up here.
