Savings and investments are some of the hardest things for the majority of people in Ghana. And many Ghanaians there are several investments options for them, so in this post, I share with you how to invest 1000 Cedis in Ghana along with the risks involved and potential profits you could derive from each avenue.
How to invest 1000 cedis in ghana: 5 simple ways
Below are 5 simple ways on to how to invest in ghana;
1. Opening a Savings Account
One of the safest and easiest ways on how to invest 1000 Cedis in Ghana is to open a savings account with any of the approved banks in Ghana like Ghana commercial bank, Ecobank, GTBANK, UBA, Cal bank, Zenith bank, and the others.
In simple terms, a savings account allows you to save your money securely while making a profit from it. Meaning, you are borrowing your money from the bank so that they can offer loans to other customers, so the bank pays you a little interest as a way of saying thank you.
You can withdraw your money at any time from your savings account however there is a limit on the number of free withdrawals you can make each month. Withdrawals beyond your monthly limit attract charges.
Interest rates on a savings account are usually very small, ranging from between 2% and 10%. Savings accounts come with the least risk. You are almost certain your money will be safe no matter what happens.
You need very little money to open a savings account. Some banks even let you open a savings account without any money!
2. Buying Treasury Bills
A treasury bill is a short time investment product offered by the Bank of Ghana on behalf of the government. This allows you to buy a treasury bill and invest for either 3 months (91 days), 6 months (182 days), or 1 year (365 days).
This is another great method on how to invest in Ghana and make huge profits.
The interest rate associated with the money you lend to the government depends on how long you lent the money for. (3 months, 6 months, or 1 year).
You can check the current rate from the Bank of Ghana website
Here are some reasons why you should consider buying treasury bills:
- Treasury bills are risk free.
- They can easily be converted to cash or even used as collateral for a loan.
- The interest rates are much higher compared to savings accounts.
- You can collect your interest on the day you purchase the treasury bill.
To buy Treasury bills, just walk into any bank with your money and complete the form. You can buy treasury bills starting from as low as GHC10 even via your Mtn mobile money with eco bank.
For more information on treasury bills, you can check out NTHC.
3. Opening a Fixed Deposit Investment Account
Fixed deposits are like treasury bills. But at this point you’re lending money to the bank and not the govt. For fixed deposits, you open an investment account with a bank and deposit money in it at a hard and fast rate of interest for the amount of the investment.
Different banks have different tenures(maturity periods) but the foremost popular ones are 90 days, 180 days, and 1 year. Some banks go as far as 2 years. The interest rates on your investment and therefore the minimum amount of cash you would like to open a hard and fast time deposit account varies from bank to bank.
The rate of interest also depends on the quantity you’re investing in and therefore the maturity period. as an example, for CAL Bank, the rate of interest for investment between Ghc 5,000 and GHC 49, 999 for a 3 month period is 14.15% and you would like a minimum of Ghc 5000 to open the fixed time deposit account whereas for normal Charted Bank, the rate of interest for investment between GHC 20,000 and GHC 40,000 for a 3 month period is 7.5% and you would like a minimum of GHC 1,000 to open the account.
Some banks will allow you to withdraw from your fixed time deposit account while some banks won’t. Banks will however charge you a penalty if you opt to terminate your investment before the maturity period.
You can check out the websites of each bank to find out the specifics of their fixed deposit accounts.
Here are some reasons why you should consider opening a fixed deposit investment account
- Fixed deposits are very low risk
- They can easily be converted to cash or even used as collateral for a loan
- The interest rates are higher than savings accounts.
- If you are investing a very large amount, you can negotiate the interest rate.
4.Buying Shares/Stock in a company
Shares are investments that you simply make during a company reciprocally for dividends. once you buy shares during a company it means you own a part of the corporate and you get a percentage of the profits the corporate makes counting on what proportion of the corporate you own.
Shares are a generally high-risk investment since there’s an opportunity that things could go very wrong and you’ll lose all of your money. Also, the worth of your money can depreciate or appreciate counting on circumstances.
In Ghana, if the company you want to invest in is listed on the Ghana Stock Market, then the stocks are regulated by the Ghana Stock Exchange. Before you buy shares in any company, it’s best to solicit the advice of experts known as brokers in order to make the best decisions especially on which companies to invest in.
A mutual fund may be a company that pools together a gaggle of people’s money and invests it on their behalf. Mutual funds also are called Collective Investment Schemes. Investing in mutual funds allows individuals to pool resources with other individuals and investors so as to make a greater buying power. The funds gathered are then invested into stocks, bonds, and other assets.
The interest rates for mutual funds are generally high, some going as high as 20%. The advantage of investing in mutual funds is that your money is managed by professionals who can make the simplest financial decisions so as to grow your money. Also, mutual funds are affordable. the danger involved however is comparatively high.