Updated 28 October 2026
Quick answer: a Sacco suits you if you want to borrow, usually up to several times your deposits, and can leave your money locked in for years. A money market fund (MMF) suits you if you want your money back within a few days and a steady, low-risk return. On official figures, regulated Saccos paid an average dividend of 10.46% on share capital and 7.14% interest on member deposits for 2024 (SASRA), while, for example, the Old Mutual Money Market Fund published a yield of 10.33% as at 21 October 2026. Tax and access differ more than the headline rates do.
This guide compares the two on return, tax, access, safety and borrowing, with a worked example. It is information, not financial advice.
Sacco vs Money Market Fund at a Glance
| Item | Sacco (deposit-taking) | Money market fund |
|---|---|---|
| What you hold | Share capital (earns a dividend) and member deposits (earn interest, often called a rebate) | Units in a fund that invests in short-term government securities, bank deposits and similar |
| Typical return | 2024 sector averages: 10.46% dividend on shares, 7.14% interest on deposits (SASRA) | Varies by fund and week; e.g. Old Mutual MMF 10.33% as at 21 Oct 2026, Madison MMF 10.38% (Oct 2026) |
| When returns are paid | Once a year, after the AGM approves results (usually February to May) | Accrues daily and is credited as set out in each fund’s terms |
| Access to your money | Deposits are usually non-withdrawable while you are a member; leaving can take a notice period; share capital is transferred, not refunded | Withdraw usually within a few working days, per each fund’s terms |
| Borrowing | Main benefit: loans often several times your deposits, with guarantors | No loans against the fund in the normal case |
| Regulator | SASRA (deposit-taking and non-withdrawable deposit-taking Saccos) | Capital Markets Authority (CMA) |
| Minimum | Set by each Sacco: share capital plus a monthly deposit | Set by each fund; check the fund’s fact sheet |
Source line: SASRA Sacco Supervision Annual Report 2024 (released September 2025) for Sacco averages; fund managers’ own published yields for MMFs, as tracked on our T-bill and MMF rates tracker. MMF yields are published in different ways (daily rate or three-month average), so compare carefully.
Returns: Look Beyond the Headline
A Sacco dividend of about 10% is paid only on share capital, which for most members is a small fixed amount. Most of a member’s money sits in deposits, which earned an average of 7.14% in 2024. So the return on the bulk of your savings is closer to the deposit rate. SASRA says both rates were above what commercial banks paid on savings.
An MMF yield applies to your whole balance, but it moves with interest rates. When Treasury bill rates fall, MMF yields usually follow. The 364-day T-bill paid 9.03% at the auction for value date 26 October 2026, according to CBK results.
Tax
- MMF: returns are interest and are taxed at 15% withholding tax, deducted by the fund.
- Sacco dividends: taxed at the 5% resident withholding rate for dividends.
- Sacco deposit interest: ask your Sacco how it treats the rebate for tax, as it is shown on your annual statement.
Worked Example: KSh 100,000 for One Year
| Item | Sacco deposits at 7.14% (2024 average) | MMF at 10.33% (Old Mutual, 21 Oct 2026) |
|---|---|---|
| Gross return | KSh 7,140 | About KSh 10,330 (if the yield held all year) |
| Can you withdraw any time? | Usually no | Yes, within days |
| Can you borrow against it? | Yes, often up to 3 or 4 times deposits | No |
This is an illustration using published averages and one fund’s yield, not a forecast. Individual Saccos pay above or below the average, and MMF yields change weekly. Tax treatment as described above.
Safety
- Saccos: only Saccos licensed by SASRA may take deposits. Check capital ratios and bad-loan levels in SASRA’s report; some Saccos have struggled to refund members who exit. Use our licensed lender and Sacco checker and read the risks and rewards of Saccos.
- MMFs: only CMA-approved funds should be used. A fund’s value can fall in rare cases, and yields are not guaranteed.
Which Should You Choose?
- Emergency fund: MMF, because you can reach the money quickly.
- Saving to borrow for land, a car or school fees: Sacco, because loans are built on your deposits.
- Both: many people keep a monthly Sacco deposit for borrowing power and park spare cash in an MMF.
Compare Saccos in the best Saccos in Kenya, estimate repayments with Sacco loan calculators, and see MMFs vs Treasury bills.
Frequently Asked Questions
Is a Sacco better than a money market fund?
Neither is better for everyone. Saccos are better for borrowing; MMFs are better for access to your money.
What did Saccos pay in dividends for 2024?
SASRA reports an average dividend of 10.46% on share capital and 7.14% interest on deposits for regulated Saccos.
How is MMF interest taxed in Kenya?
At 15% withholding tax, deducted by the fund.
Can I withdraw my Sacco deposits?
Usually only when you leave the Sacco, after its notice period. Check your Sacco’s by-laws.
Last checked 25 October 2026: SASRA Sacco Supervision Annual Report 2024, CBK auction results and fund managers’ published yields. Information only, not financial advice.
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