Savings play a major role in economic development since an increase in savings leads to an increase in investment hence improve gross domestic product. Low savings in an economy means unfavorable growth of the economy, poor job creation and inferior overall living standards relative to nations with a better savings performance. The study used KIHBS 05/06 data which covered a total of 13,430 households across all districts in Kenya, both rural and urban. For the purposes of this project a sample of 1500 households was considered. The results show that both male and female household heads save a portion of their household income in Kenya.The study revealed that household heads within the age bracket of 45-65 years had the highest (65.6 percent) saving rate of 0.00-0.20 percent and the least (9.4 percent) saving rate of 0.041-0.60. Results showed that savings is positively related to total income, gender and education but negatively to employment status, age and age squared of the household head. Being a male household head indicate that the household saving would increase by Shs. 2,824.26 while being a female household head, the household saving would increase by Shs. 13,047.4. The study recommends that Low income earning households should be sensitized on the importance of savings. Results also indicate that the more the level of education of the households heads the more the likelihood of falling within higher saving rate threshold. Therefore the government should put up measures to educate as many people as possible.