Uganda has made remarkable strides in financial resilience, with the number of citizens saving for future expenses rising from 40% in 2018 to an impressive 60% in 2023 according to a study by FSD Uganda. This progress, partly driven by the financial challenges posed by COVID-19, signals a growing awareness of the importance of savings. However, a concerning trend has emerged: the number of Ugandans keeping their money at home has tripled, becoming the second most common savings method. 

While saving is a positive habit, keeping money 'under the mattress' comes with significant risks and missed opportunities. Let's explore a smarter alternative: "parking your money." 

What Does "Parking Your Money" Mean? 

Parking your money refers to placing funds in safe, easily accessible investments for short periods. The goal isn't massive growth but preserving your capital while earning more than you would by keeping cash at home or in a typical savings account.  

Why Should Ugandans Consider Parking Their Money? 

1. Safety: Money at home is vulnerable to theft, fire, or other disasters. Financial institutions offer security. 
2. Value Preservation: Uganda's inflation rate (about 5-6% annually) meaning cash at home loses value over time. 
3. Small Returns: Even modest interest is better than no growth at all. 
4. Easy Access: Unlike long-term investments, parked money remains readily available for emergencies or opportunities. 

When Should You Park Your Money? 

1. Emergency Funds: Keep 3-6 months of expenses easily accessible. 
2. Saving for Goals: Whether it's school fees, a wedding, or starting a business, parking money helps you reach your goals safely. 
3. Seasonal Income: Farmers or those with irregular income can park money during high-earning periods. 
4. Remittances: If you receive money from abroad, parking it can preserve its value until you need it. 

Where Can Ugandans Park Their Money? 

1. Unit Trust Funds: Unit Trust Funds like XENO Investment offer access to diversified portfolios with investment instruments like treasury bills, bonds and company stocks that provide good returns.  
2. SACCOs: Savings and Credit Cooperative Organizations often provide good returns, with access to credit and loans and are widespread across Uganda. 
3. Treasury Bills: Short-term government securities, available through banks or directly from Bank of Uganda. 
4. Fixed Deposit Accounts: These offer higher interest rates for committing your money for a set period. 

Tips for Effective Money Parking in Uganda 

1. Compare Options: Interest rates and terms vary between institutions, so it is important to conduct your due diligence and shop around. 
2. Understand the Terms: Be clear on withdrawal restrictions or fees. 
3. Start Small: Even parking a portion of your savings is a good start. 
4. Stay Informed: Keep an eye on interest rates and new savings products in the market. 
5. Combine Methods: You might keep some cash at home for immediate needs while parking the rest. 

The Bottom Line 

For many Ugandans, the shift from keeping money at home to parking it in financial institutions represents a significant change in mindset. However, this shift brings increased security, preservation of value, and even small returns on your savings. It's not about getting rich quickly, but about smart, safe money management that protects your hard-earned shillings and sets you up for a more stable financial future. 

Remember, everyone's financial situation is unique. Consider reaching out to our trusted financial advisors to find the best strategy for your needs and goals. Feel free to call or WhatsApp us at +256 0392177488, or email us at uganda@myxeno.com.

Happy Parking!