Where to save money in 2023 – Money Market or Sacco?

There are over 5000 SACCOs in Kenya and this sheer statistic is enough to show you that they are popular. As for Money Markets Funds, the number is drastically lower because they are offered by a few banks and Insurance companies. What is a money market fund? A money market fund is a one year-short…

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There are over 5000 SACCOs in Kenya and this sheer statistic is enough to show you that they are popular. As for Money Markets Funds, the number is drastically lower because they are offered by a few banks and Insurance companies.

What is a money market fund?

A money market fund is a one year-short term investment where you save your money and you earn a daily interest rate. The earned interest is then compounded and deposited to your account on a monthly basis.

Examples of Money Market Funds in Kenya are : CIC Insurance MMF, ICEA LION MMF, Sanlam MMF, Britam MMF,  NCBA Bank MMF, Equity Bank MMF and more.

Here are key things to consider before choosing to save either in a SACCO or a Money Market Fund.

Comparison between saving money in SACCOs and Money Market

SACCOMoney Market Fund
1.Access to loans from the Sacco1.Doesn’t offer loans
2. Can’t withdraw savings easily2. Can withdraw savings in less than 48hrs
3.Best for locked savings3.Best for emergency savings
4.A lot of manual paper work when opening an account.4.Most MMFS are paperless and can be opened online at any time
5.Charges opening account fees5.No fees when opening an account
6.Different interest rates for different savings amounts. I.e. 5% for 40k savings, 8% for savings between 40k- 120k6.Fixed Interest rates for all savings regardless of the amount saved i.e.  8% for all savings
7. Limited transparency –
A few SACCOs have an online system and mobile applications for tracking your account activities. Most use USSD
 7.Full Transparency – Most MMFS have mobile apps and a web-based system
8. Have other investments such as share capital: dividends 8. No share holdings
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Summary

The best place to save money for an emergency is the MMF because your can withdraw your money within 48 hours and online without any paperwork.

SACCO savings are best for long term savings and for taming the habit of withdrawing since they are not easily accessible with the touch of a button.

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2 responses to “Where to save money in 2023 – Money Market or Sacco?”

  1. Timmy Steffens Avatar
    Timmy Steffens

    I was excited to uncover this site. I want to to thank you for ones time just for this fantastic read!! I definitely loved every part of it and i also have you saved to fav to see new information on your blog.
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    1. Ivy Oyori Avatar

      Thanks Timmy.

      Glad you found the post enjoyable

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