The interest rate on money kept in savings accounts can now reveal the better deal in the banks vs Saccos war for saving deposits.
According to the Sacco Societies Regulatory Authority (Sasra), Saccos currently offer a better deal than banks.
Sasra says that in the year ended December 31, 2021, Saccos paid an average of between 6.83 percent and 10.55 percent. These rates covered the payouts on saccos’ savings and share capital.
Banks on the other hand paid an interest of 4.02 percent on savings accounts in the same review period.
“The analysis shows that indeed saccos shall continue to have a competitive edge in the returns earned by the members with the average rate of interests paid by [deposit taking] saccos on members’ deposits increasing from 6.01 percent in 2020 to 6.88 percent in 2021,” Sasra said in its annual report.
“These rates by far exceeded the interest rates paid by banks over the same period which stood at 4.02 percent.”
Non-withdrawable deposit-taking (NWDT) saccos paid an average interest rate of 6.83 percent in 2021 compared to an interest rate on the deposits of 5.63 percent in 2020.
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Besides interest on deposits, members of saccos also earned returns on their shares in the form of dividends which was paid at a high of 9.44 percent by DT-saccos in 2021 compared to a rate of 8.26 percent paid in 2020,” Sasra said.
“The NWDT-saccos on the other hand paid dividends at the rate of 10.55 percent in 2021 compared to a dividend rate of 8.16 percent paid in 2020.”