How To Start A Piggy Bank Account In Nigeria

Saving money is one of the most essential habits for achieving financial stability. Whether you're working towards short-term goals like buying a new phone, or long-term plans like purchasing a house or starting a business, having a reliable savings strategy is key. In Nigeria, saving can sometimes be challenging due to economic volatility and the rising cost of living, but there are tools and methods that can make saving easier. One such method is opening a piggy bank account.

This blog post will walk you through the steps needed to start a piggy bank account in Nigeria, the benefits of this savings method, and why digital piggy bank platforms like PiggyVest and Cowrywise are growing in popularity.

What is a Piggy Bank Account?

Traditionally, a piggy bank is a container where people physically store small amounts of money over time. In the past, these were often literal pig-shaped boxes or jars. However, in the modern context, particularly in Nigeria, a piggy bank account refers to both traditional savings strategies as well as digital savings platforms designed to help people save in small, manageable amounts consistently.

Digital piggy bank accounts in Nigeria allow you to save automatically and securely without the temptation to spend your savings impulsively. These platforms, such as PiggyVest and Cowrywise, also offer higher interest rates than regular savings accounts with commercial banks, making them more attractive for savers.

Benefits of a Piggy Bank Account

Before diving into the steps on how to open a piggy bank account in Nigeria, it’s important to understand the benefits of using this savings method:

1. Discipline in Saving: A piggy bank account helps you cultivate the habit of saving consistently. With digital platforms, you can set up automatic transfers from your main account, which encourages regular savings without manual effort.

2. Interest on Savings: Most digital piggy bank platforms in Nigeria offer higher interest rates compared to regular savings accounts with traditional banks. This means you get to earn more from your saved money.

3. Goal-Oriented Savings: Piggy bank accounts can be structured around specific financial goals. For instance, if you’re saving for a vacation, new gadget, or a major purchase, these platforms help you set clear targets.

4. Safe Lock Feature: One major challenge of saving is the temptation to dip into your savings for non-emergency expenses. Digital piggy bank accounts often come with “safe-lock” features, allowing you to lock your funds for a set period. This ensures you don’t withdraw the money prematurely.

5. Emergency Funds: Having a piggy bank account can provide a reliable source of emergency funds, which are crucial in a country like Nigeria where unforeseen expenses may arise, such as medical bills, car repairs, or family emergencies.

6. Low Fees and Charges: Unlike some traditional bank accounts that may charge high fees for account maintenance or transactions, most digital piggy bank platforms charge minimal fees or are completely free.

Step-by-Step Guide to Starting a Piggy Bank Account in Nigeria

1. Determine Your Savings Goals

Before you open any type of savings account, you need to identify what you’re saving for. Having clear savings goals will help you stay committed to your financial plan. Some examples of savings goals could be:

• Emergency Fund: This is one of the most important savings goals. Financial experts recommend having an emergency fund that covers 3 to 6 months of living expenses.
• Education Fund: If you’re planning to pay for your education or your children’s education, setting up a savings plan around this goal is crucial.
• Buying a Home: For many Nigerians, owning property is a long-term goal. Saving toward a down payment can be made easier through a piggy bank account.
• Investments: You may want to save up to invest in the stock market, a business venture, or real estate.
• Vacation or Travel: Whether it's a domestic getaway or an international trip, having a travel fund helps you achieve this without relying on loans or credit cards.

Identifying your goals ensures that you are not saving haphazardly and gives your piggy bank account a clear purpose.

2. Choose the Right Platform

In Nigeria, several digital piggy bank platforms allow users to save effortlessly and securely. The most popular ones are:

• PiggyVest: Launched in 2016, PiggyVest is a savings and investment platform that allows users to save little by little daily, weekly, or monthly. It offers various savings plans, including regular savings, safe-lock accounts, and a target savings feature.

• Cowrywise: Cowrywise is another popular platform that helps users save and invest money with better returns than traditional savings accounts. It offers goal-oriented savings plans, as well as investment opportunities in mutual funds.

• KoloPay: This is a more recent addition to the Nigerian savings app ecosystem. Like PiggyVest and Cowrywise, KoloPay allows you to save consistently towards specific goals.

When choosing the right platform, consider the following factors:

• Interest Rates: Look for platforms that offer competitive interest rates to help you grow your savings.
• Safety and Security: Ensure the platform you choose is regulated by the appropriate authorities like the Central Bank of Nigeria (CBN) and offers top-notch security features to protect your funds.
• User Experience: The platform should be easy to use and offer features that allow for flexibility in saving.
• Withdrawal Policies: Understand the withdrawal policies, including any penalties for early withdrawals, so that you can plan accordingly.

3. Create an Account

Once you’ve selected the platform that best fits your needs, the next step is to create an account. Here’s a general process for setting up your piggy bank account on most platforms:

• Download the App: Visit Google Play Store (for Android users) or Apple Store (for iOS users) to download the app.
• Sign Up: You’ll need to provide some personal information, including your name, phone number, email address, and Bank Verification Number (BVN). The BVN ensures that the platform complies with CBN regulations and helps protect your account.
• Set Up a Savings Plan: After signing up, you can create a savings plan. Many platforms allow you to select how often you want to save (daily, weekly, or monthly), the amount you want to save, and the duration of your savings plan.

4. Set Automatic Savings

One of the key advantages of using a digital piggy bank account is the ability to automate your savings. Automation ensures that you stay consistent with your savings, even if you forget or are tempted to spend the money elsewhere.

Here’s how to set up automatic savings:

• Link Your Bank Account: Most platforms require you to link your primary bank account, from which the savings amount will be automatically deducted. This ensures that the funds are transferred without you having to do it manually.
• Set Frequency and Amount: Decide how much you want to save and how frequently you want to do it. For example, you could set it up to save ₦1,000 daily or ₦5,000 weekly, depending on your financial situation.
• Select Duration: You can specify the period for which you want the automatic savings to run. Some people may set up a recurring savings plan for a few months, while others may choose to save for several years.

5. Use the Safe-Lock Feature

If you're worried about dipping into your savings before you reach your goal, the safe-lock feature can be incredibly useful. This feature allows you to "lock" your money away for a set period, ensuring that you don't have access to it until the time has elapsed.

Here’s how to use the safe-lock feature effectively:

• Determine the Lock-In Period: You can choose to lock your savings for anywhere from a few months to several years. Once locked, the money cannot be accessed until the period is over.
• Take Advantage of Higher Interest Rates: The safe-lock feature often comes with higher interest rates because you're committing your money for a set period. This makes it an ideal option for long-term savings goals.

6. Track Your Progress

It’s important to regularly monitor your savings progress to ensure that you’re on track to meet your financial goals. Most digital piggy bank platforms offer dashboards or tools that allow you to see how much you’ve saved, the interest earned, and how close you are to reaching your target.

By keeping an eye on your progress, you’ll be able to adjust your savings plan if necessary. For example, if you receive a salary increase, you might decide to save more each month, or if an emergency arises, you may need to temporarily reduce your savings amount.

7. Withdraw Funds Responsibly

Once you’ve reached your savings goal or the safe-lock period has expired, you can withdraw your funds. However, it’s essential to withdraw responsibly, ensuring that you’re using the money for the purpose you initially saved for.

Many platforms allow you to withdraw directly to your linked bank account. Be mindful of any withdrawal fees or penalties that may apply, especially if you're withdrawing funds before the set savings duration.

Conclusion

Starting a piggy bank account in Nigeria is a simple yet effective way to build a solid financial foundation. Whether you're saving for emergencies, future investments, or personal goals, platforms like PiggyVest, Cowrywise, and others make it easy to save consistently and earn higher returns than traditional savings accounts. By following the steps outlined in this guide—setting savings goals, choosing the right platform, automating your savings, and using features like safe-lock—you’ll be well on your way to financial success.

Remember, the key to successful saving is consistency, discipline, and proper planning. Start small if necessary, but make sure to stay committed to your savings journey. Over time, you'll see the benefits of your efforts in your growing piggy bank account.