Saccos vs money market funds: Which gives the best return?

Money Market Funds (MMFs) and Savings and Credit Cooperative Organizations (SACCOs) are both money-saving instruments that have gained popularity in the country. And they both promise one thing — to make your money work for you.

The two work in different ways therefore understanding their unique features before making a choice is vital.

What are SACCOs?

Saccos are member-owned financial cooperatives whereby members put together their savings that accumulate to provide a source of affordable loans to each other.

Saccos cater for specific groups such as a community, employees of a particular company or employees of specific occupation/profession.

They are regulated by local cooperative societies laws and guidelines. In Kenya, they are Sacco Societies Regulatory Authority (SASRA), which is a Government’s agency responsible for the overseeing and regulation of cooperatives.

What are Money Market Funds?

Money Market Funds are investment funds specialising in low-risk, short-term debt securities like government bonds, commercial papers and treasury bills. They aim for stable returns and prioritise liquidity as well as safety.

MMFs are regulated by financial market authorities and their activities are supervised by professional fund managers.



Saccos are owned and operated by members whereas MMFs are managed by investment firms.

Investment focus

MMFs invest in low-risk securities while Saccos focuses on providing loans to their members.


Saccos returns come in form of dividends based on performance while MMFs offer interest income based on the underlying investments.


Due to Saccos’ nature of lending to members they can have a slightly higher risk as compared to MMFs.

Access to funds

Saccos often have rules governing withdrawals, while MMFs generally offer higher liquidity.


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I) Affordable Loans

Sacco loans attract interest that is lower as compared to traditional banks.

II) Community-Focused

Saccos mostly serves members’ specific needs.

III) Democratic Structure

Members of the Sacco usually have a say in the operations of their organisation.

IV) Financial Education

Saccos invest on training their members especially on financial literacy.


I) Professional Management

They are run by experienced fund managers.

II) Low Risk

MMFs focus on capital preservation thus low risk.

III) Liquidity

Investors with MMFs easily access their invested funds.

IV) Potential for Stable Returns

MMFs offer attractive interest rates.

Which should you choose?

The best option depends on your individual needs and risk tolerance.

Consider these factors:

I) Your risk appetite

You should ask yourself some questions before arriving at a conclusion. How contented will you be with potential fluctuations in returns?

II) Your financial goals

Are you saving for a short-term period, or your aim is for a long-term growth?

III) Access to funds

How fatser might you want to access your savings?

IV) Community ties

Do you put in consideration the community factor and member benefits of a Saccos?


Both Saccos and MMFs provide good options to save. As a potential investor, it is wise to weigh their distinct features against your financial objectives to arrive at the decision. Notably, it is advisable to get in touch with with a financial advisor for professional guidance.

By our reporter

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