What the 13.5% NSSF Interest Means for Members

The National Social Security Fund (NSSF) has declared an interest rate of 13.5% for the financial year 2024/25, a jump from 11.5% the previous year. The Fund says the declaration will result in payments of about Shs2.79 trillion to member accounts and follows strong growth in assets and contributions during the year.

The Numbers

• Interest declared: 13.5% for FY 2024/25.
  
• Estimated payout to members: ~Shs2.79 trillion, credited to members’ opening balances as at 1 July 2024.
  
• Why now: Stronger asset growth, improved income, and tighter cost control supported the higher declaration.
  

The interest is applied to each member’s opening balance on 1 July 2024.

• A member with Shs100,000 would earn Shs13,500.
  
• A member with Shs1,000,000 would earn Shs135,000.
  
• A member with Shs10,000,000 would earn Shs1,350,000.
  

These are nominal credits for the year and will appear on member accounts under NSSF’s annual interest declaration.

The rate rose due to better investment returns and higher contributions. Assets under management and contributions increased significantly, and the fact that the Fund cut administrative expenses, freeing more earnings to be passed on to members.

What members should also consider

While the 13.5% rate is impressive, members need to weigh it against inflation. A high inflation rate can erode purchasing power, meaning the real benefit of the declared interest may be less than the headline figure suggests.

It is also important to note that the rate applies only to balances held on 1 July 2024. Any contributions made after that date will not earn the declared interest until the next financial cycle. This timing factor can make a big difference, especially for members who joined later in the year or made significant top-ups after July.

Another consideration is taxation and withdrawals. Members who access their funds early or whose accounts are subject to certain tax rules may receive less than the full benefit of the declared interest. Understanding these conditions is key to avoiding disappointment when payouts are made.

Finally, sustainability should not be overlooked. Although the Fund’s performance this year has been strong, future declarations will depend on broader economic conditions, investment outcomes, and continued contribution compliance. Members should therefore see this rate as encouraging but not guaranteed for every year.

How this compares

Compared to other savings and investment options in Uganda, NSSF’s 13.5% is highly competitive. It comfortably outpaces most bank deposit rates and many alternative savings vehicles, underlining the value of long-term retirement savings with the Fund.

Members are encouraged to check their opening balances as at 1 July 2024 to estimate the credited interest. Keeping track of employer contributions is equally important to ensure that no gaps affect the final payout. Above all, members should take a long-term view. The greatest benefit from NSSF comes from consistent contributions and the power of compounding over time, which magnifies the impact of strong rates like this one.

Bottom line

The 13.5% declaration is a welcome boost for members and reflects a strong year for NSSF. Its real value, however, depends on inflation, timing, and individual circumstances. For most savers, it’s a significant increase in retirement balances and a timely reminder of the importance of consistent contributions and long-term planning.