There are various ways to invest surplus funds in Kazakhstan, including savings accounts and bank deposits, bonds, stocks, investment funds, currency instruments, and gold.
There is no universal answer to the question of where it is best to invest money. The appropriate option depends on the investment objective, investment horizon, risk tolerance, and how quickly the funds may be needed. One instrument may be well suited for building a financial reserve, another for generating potential regular income, and a third for long-term capital growth.
Let’s take a closer look at the main options and their features.
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This material is for informational purposes only and does not constitute investment advice. Investing always involves the risk of losing capital. |
How to Start Choosing an Investment Instrument
Before deciding where to invest money in Kazakhstan, it is worth answering four questions:
• What are you investing for?
• When might you need the money?
• How much decline in the value of your capital are you willing to accept?
• How important is it for you to be able to access your funds quickly?
The potential return of any investment instrument should be considered together with its risks, investment horizon, and liquidity.
Investment Objective
An investor may have several different objectives.
Capital preservation. In this case, reliability, ease of understanding, and access to funds are usually the key considerations.
Generating potential regular income. For this purpose, investors may consider instruments that provide interest, coupon, or dividend payments. However, the amount and regularity of investment income are not always guaranteed.
Long-term capital growth. If the money will not be needed for several years, an investor may consider instruments with greater volatility but also higher growth potential.
Currency diversification. Part of the capital can be allocated across assets denominated in different currencies to reduce the portfolio’s dependence on the performance of a single currency.
These objectives may be combined. For example, part of the money can be kept in liquid instruments that can be sold quickly if necessary, while the remainder can be invested for the long term.
Investment Horizon
The investment horizon is the period for which an investor is willing to invest their money.
• Short-term — the money may be needed in the near future;
• Medium-term — the funds will not be needed for 3–5 years;
• Long-term — the capital is invested for 5–10 years or more.
The shorter the investment horizon, the more important predictability and liquidity become. If the money is needed within a few months, significant fluctuations in an asset’s value may become a problem, even if its long-term prospects appear attractive.
With a longer investment horizon, an investor may generally find it easier to wait out temporary declines in the market value of assets.
Risk and Liquidity
Investment risk indicates how uncertain the financial outcome may be. The value of some instruments changes very little, while others may experience significant price increases and declines.
Liquidity indicates how quickly an asset can be converted back into cash and how predictable the price of such a sale will be.
High potential returns alone do not make an investment instrument suitable. It is important to understand what an investor gives up in exchange for this potential in terms of risk, volatility, or limited access to funds.
Savings Account and Bank Deposit
A savings account and a bank deposit allow you to place money with a bank and earn interest income under the terms of a specific product.
A savings account generally provides more flexible access to funds. It is often used for money that may be needed in the near future, including part of a financial reserve.
A bank deposit may have a fixed term, as well as specific conditions for adding or withdrawing funds and a defined method for calculating interest.
The advantages of banking products include their relative simplicity and straightforward income-generation mechanism.
At the same time, it is important to review the following in advance:
• the deposit term;
• early withdrawal conditions;
• whether additional funds can be added;
• the currency;
• how interest is calculated;
• the applicable deposit guarantee terms.
In Kazakhstan, individual deposits held with banks are protected by the Kazakhstan Deposit Insurance Fund (KDIF) within the established limits. According to the KDIF, the maximum guarantee depends on the type and currency of the deposit: up to KZT 20 million for savings deposits in tenge, up to KZT 10 million for other deposits in tenge, and up to KZT 5 million for deposits in foreign currency. Before placing funds, it is advisable to check the current terms on the KDIF website.
Deposits and investment instruments serve different purposes, so it is not always appropriate to compare them in terms of which is “better.” For example, a banking product may be used for a short-term financial reserve, while an investment portfolio may be used for longer-term objectives.
Bonds
A bond is a debt security. By purchasing one, an investor effectively lends money to a government, company, or other organization on specified terms.
The issuer may pay the investor coupon income and, on a specified date, redeem the bond and return the principal amount invested.
Before purchasing a bond, it is important to consider several parameters:
• maturity;
• coupon rate and payment schedule;
• current market price;
• yield;
• creditworthiness of the issuer;
• currency of issue.
The market price of a bond may change. Therefore, an investor’s actual return depends not only on coupon payments but also on the price at which the security is purchased and sold.
Kazakhstani investors have access to government and corporate bonds, including securities traded on the KASE and AIX exchanges, as well as issues by foreign issuers through brokerage services. Learn more about how to invest in bonds on the Freedom Investments website.
Government Bonds
Governments issue debt securities to raise financing.
Their credit risk is generally considered lower than that of corporate issues in the same market and currency, although no financial instrument is completely risk-free.
Government bonds can be used in a portfolio as an instrument for capital preservation, generating interest income, and diversification.
Corporate Bonds
Corporate bonds are issued by companies.
The potential return on these securities may be higher; however, investors take on the risk associated with the specific issuer. If the company’s financial position deteriorates, it may face difficulties making coupon payments or repaying its debt.
Therefore, when selecting corporate bonds, it is important to analyze the issuer’s financial position, debt burden, credit rating, issue terms, and time to maturity.
Stocks
A stock is a security that gives an investor an ownership stake in a company.
A stockholder’s financial return may consist of two components:
• changes in the market price of the security;
• dividends, if the company decides to pay them.
However, neither an increase in the stock price nor the payment of dividends is guaranteed.
Potential Return and Volatility
A stock’s price depends on the company’s financial performance, investor expectations, industry conditions, interest rates, the economic environment, and many other factors.
As a result, stocks can rise significantly or experience substantial price declines.
Even stocks of large, financially stable companies can experience periods of significant decline. It is important for investors to understand in advance whether they are prepared for this level of volatility and risk.
Investment Horizon for Stocks
Investors often consider stocks as a long-term investment instrument. Of course, professional traders may engage in short-term speculative transactions. However, for most market participants, stocks are primarily a way to invest in a business and participate in its growth potential.
The shorter the investment horizon, the greater the risk of being forced to sell securities at an unfavorable time. A longer investment horizon does not eliminate the risk of losses, but it gives investors more time to withstand market fluctuations.
At the same time, the risks associated with individual companies can be reduced through diversification by allocating money among securities issued by different companies.
In Kazakhstan, investors can use a brokerage account to invest in shares of Kazakhstani companies as well as securities issued by foreign companies. The specific range of available securities depends on the broker and the trading venues it provides access to. The ability to gain access to international markets allows investors to diversify their capital across companies from different countries and industries.
Investment Funds and ETFs
An investment fund pools money from multiple investors and invests it in a specific set of assets.
An ETF is one type of investment fund whose units are traded on an exchange similarly to ordinary stocks.
Instead of purchasing shares in a single company, an investor can buy a fund that holds dozens, hundreds, or even thousands of securities.
For example, a fund may invest in:
• broad-market stocks;
• companies from a particular country;
• a specific sector of the economy;
• bonds;
• gold;
• other asset classes.
The main advantage of this approach is diversification. Negative performance of a single asset has less impact on the portfolio when that asset represents only a small share of it.
When choosing a fund, it is important to consider its investment strategy, asset composition, fees, currency, liquidity, and risks.
Diversification reduces dependence on the performance of individual securities but does not protect against an overall market decline.
Through a brokerage account, investors in Kazakhstan may have access to ETFs tracking broad international indices, bonds, specific sectors, gold, and other assets. Before purchasing, it is worth checking which funds are available through the selected broker, which exchange they are traded on, and what fees apply.
Currency Instruments
Buying foreign currency does not, by itself, guarantee a return.
Exchange rates can move in either direction. Therefore, viewing currency solely as a way to profit from its appreciation can be risky.
A more practical purpose of currency instruments is diversification.
For example, if all of an investor’s income, expenses, and savings are denominated solely in tenge, their financial position is heavily dependent on a single currency. Holding part of one’s assets in US dollars, euros, or other currencies can reduce this concentration.
Currency exposure can be obtained not only by holding foreign currency but also through securities and other financial instruments denominated in foreign currencies.
For currency diversification, investors can also consider investment instruments linked to SOFR and EURIBOR rates. Their terms and potential returns depend on the respective market rates.
For investors in Kazakhstan, currency diversification can be particularly relevant when most income and expenses are denominated in tenge, while future financial goals are linked to US dollars, euros, or other currencies. Currency exposure can be created through banking products as well as securities denominated in foreign currencies.
When choosing an approach, it is important to consider your future expenses. If a financial goal involves another currency—for example, education or a major purchase abroad—the currency composition of your savings becomes especially important.
Gold and Precious Metals
Gold is traditionally considered one of the instruments for diversification and capital preservation.
Its price may behave differently from the prices of stocks or bonds, so a small allocation to precious metals is sometimes used to reduce a portfolio’s dependence on a single asset class.
There are several ways to gain exposure to gold, depending on the instruments available to an investor: through physical metal or exchange-traded products linked to its price.
However, gold is also subject to price fluctuations.
Gold does not generate cash flow on its own, unlike a deposit that pays interest or a bond that pays coupons. An investor’s financial result mainly depends on changes in the price of the metal.
Therefore, gold should not be considered an instrument with guaranteed returns.
In Kazakhstan, investors can gain exposure to gold through physical metal (bars and investment coins issued by the National Bank) or exchange-traded instruments. Each option has its own fees, storage requirements, and liquidity, so they should be compared separately.
Comparing Investment Options: Where You Can Invest Your Money
Below is a general comparison of different investment instruments. The specific level of risk and terms depend on the product, issuer, currency, and market conditions.
| Instrument | Risk Level | Liquidity | Investment Horizon | Currency | Potential Source of Return | Complexity | Availability in Kazakhstan |
| Savings Account | Low relative to market-based instruments | High liquidity | Short-term | Depends on the product | Bank interest | Low | Through banks |
| Deposit | Low relative to market-based instruments | Depends on the terms | Short-term / Medium-term | Depends on the product | Bank interest | Low | Through banks |
| Bonds | Low to high | Depends on the issue | Medium-term / long-term | Depends on the issue | Coupon payments and changes in market price | Medium | Through a broker / exchange market |
| Stocks | Medium / high | Usually high for liquid securities | Primarily long-term | Depends on the market | Capital appreciation and dividends | Medium / high | Through a broker |
| Funds/ETFs | Depends on the fund’s assets | Depends on the fund | Medium-term / long-term | Depends on the fund | Increase in asset value and potential distributions | Medium | Through a broker |
| Currency Instruments | Depends on the instrument | Depends on the instrument | Varies | Foreign currencies | Exchange rate movements and, for certain instruments, interest income | Medium | Through banks and investment instruments |
| Gold / Precious Metals | Medium | Depends on the investment method | Medium-term / long-term | Depends on the instrument | Changes in the price of the metal | Medium | Physical gold / exchange-traded instruments |
This table does not mean that one investment instrument is objectively better than another. For example, stocks may offer high growth potential but may not be well suited for money that will be needed within a few months.
How to Choose an Investment Instrument for Your Goal
The question of “where to invest money” becomes easier to answer if you start with your objective rather than a specific product.
If You May Need the Money in the Near Future
For short-term goals, preserving capital and having quick access to funds are particularly important.
Therefore, for a financial reserve or upcoming expenses, investors generally consider the most liquid and straightforward instruments.
Investing all reserve funds in stocks or other volatile assets can be risky: when the money is needed, their market value may be lower than the purchase price.
Если цель – потенциальный регулярный доход
To generate cash flow, investors may consider:
• banking products that pay interest;
• bonds with coupon payments;
• dividend-paying stocks;
• funds that distribute income;
• other investment instruments that provide periodic payments.
However, neither the regularity nor the amount of investment income is guaranteed.
For example, a company may reduce or completely suspend dividend payments, the price of a bond may change, and an issuer may encounter financial difficulties.
Therefore, when choosing an investment instrument, it is important to assess not only the expected amount of payments but also their source and the associated risks.
If the Goal Is Long-Term Capital Growth
With a longer investment horizon, investors may pay more attention to stocks, funds, and other market-based assets.
A longer time horizon can reduce dependence on short-term market movements, but it does not eliminate the risk of a decline in the value of investments.
For many investors, instead of trying to select a single promising company, a more suitable approach may be a diversified portfolio consisting of different assets.
If the Goal Is Currency Diversification
In this case, it is important to allocate capital across assets denominated in different currencies rather than trying to predict which exchange rate will be the most favorable.
At the same time, it is advisable to align the currency composition of the portfolio with the investor’s future financial obligations.
For example, someone planning expenses in US dollars may find it important to hold part of their assets in instruments that are also denominated in or linked to that currency.
Why You Should Not Invest All Your Money in a Single Instrument
Diversification means spreading capital across different assets.
A simple example: if an entire investment portfolio consists of shares of a single company, its financial performance depends entirely on that company’s business. If the money is spread across multiple companies, the impact of problems at any one of them is reduced.
The same principle can be applied more broadly by allocating capital across:
• different companies;
• industries;
• countries;
• currencies;
• stocks and bonds;
• other asset classes.
Diversification does not eliminate losses. During a broad market downturn, many assets may decline in value at the same time.
However, it can help avoid a situation where all of the capital depends on a single decision, company, or scenario.
Common Mistakes When Choosing Investments
Focusing Only on Potential Returns
High expected returns are usually accompanied by additional risks. Therefore, it is not appropriate to compare investment instruments based solely on this metric.
Ignoring the Investment Horizon
An asset may be attractive over a ten-year horizon while being poorly suited for money that will be needed in six months.
Investing Emergency Funds
A financial reserve is intended for unexpected expenses. If it is invested in volatile assets, you may need to sell your investments after a significant decline in price.
Investing All Capital in a Single Asset
Concentration increases the impact of a single adverse event on the entire portfolio.
Buying an Instrument You Do Not Understand
Before investing, it is important to understand at least the key characteristics of the product:
• how the investment result is generated;
• what affects its value;
• what risks are involved;
• how easily you can exit the investment;
• what fees and additional costs apply.
If you cannot explain in simple terms where the potential return is expected to come from, it is worth studying the instrument in greater detail before investing.
How to Start Investing in Kazakhstan
If you are not referring to a bank deposit but to purchasing securities, you will generally need a brokerage account.
Basic steps:
1. Determine your investment objective and investment horizon.
2. Choose a broker and check its licenses and service terms.
3. Open a brokerage account.
4. Top up the account in a suitable currency.
5. Choose available instruments based on risk, liquidity, and investment horizon.
6. Check commissions and other costs before making a purchase.
Through a brokerage account, investors in Kazakhstan may have access to bonds, stocks, ETFs, and other exchange-traded instruments. The specific range depends on the broker, trading venue, and the client’s status. If you are just getting started, it may be useful to first review resources for beginner investors.
When choosing a broker, it is important to consider its regulatory status, available markets, fees, account currencies, and funding and withdrawal terms. For example, you can open a brokerage account with Freedom Investments online, free of charge, in as little as 10 minutes.
Frequently Asked Questions
Where Can You Invest a Small Amount of Money in Kazakhstan?
The amount of capital is just one factor to consider when choosing an investment.
Even with a small amount, you can start building savings or an investment portfolio if the selected instrument allows transactions with such an amount.
It is more important to determine your objective, investment horizon, acceptable level of risk, and fees. With a small amount of capital, particular attention should be paid to fixed transaction costs, as they can have a greater impact on the overall result.
Can You Earn Investment Income Every Month?
Some instruments provide regular payments. For example, these may include banking products, bonds, dividend-paying stocks, or certain investment funds.
However, payments from market-based investment instruments are not always guaranteed and do not necessarily occur every month.
Therefore, if you need a regular cash flow, it is important to review the payment schedule and not rely on a single source of income.
Which Should You Choose: a Deposit or Bonds?
These instruments should not be compared based solely on potential returns.
A deposit is a banking product. A bond is a marketable security whose value may change, and its reliability depends, among other factors, on the issuing company.
When choosing between them, it is worth comparing the term, liquidity, currency, income payment terms, and risks of each option.
Which Investments Are Considered the Most Risky?
Risk depends not only on the category of an investment instrument but also on the specific asset.
For example, stocks as a whole are subject to greater price fluctuations than bank deposits. However, the risk levels of two different stocks can also differ significantly.
When assessing an investment, it is important to consider the issuer’s financial position, liquidity, currency, investment horizon, diversification, and other factors.
Can You Invest in Several Instruments at the Same Time?
Yes. In fact, the principle of diversification is based on allocating capital across different assets.
A single portfolio may combine liquid funds, bonds, stocks, investment funds, currency assets, and other instruments.
The proportions depend on the individual investor’s objectives, investment horizon, and risk profile.
So, Where Should You Invest Money in Kazakhstan?
The answer depends primarily on the objective.
If the money may be needed in the near future, liquidity and capital preservation generally become the key considerations. To generate potential regular income, investors can consider instruments that provide interest, coupon, or dividend payments. For long-term capital growth, investors more often consider stocks and funds, while accepting greater volatility. Currency assets and gold can be used for additional diversification.
At the same time, you do not necessarily have to choose just one option.
In practice, different objectives can be addressed using different instruments: part of the capital can remain readily accessible for current needs, while funds that will not be needed for several years can be allocated across investment assets.
The key is to choose an instrument not based on the promise of maximum returns, but on the combination of objective, investment horizon, liquidity, and risk.
Sources and Useful Links
• Kazakhstan Deposit Insurance Fund – Deposit Guarantee
• Kazakhstan Stock Exchange (KASE) – Financial Instruments
• AFSA – Public Register of Licensed Financial Companies