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Understanding fixed deposits in SACCOs

A fixed deposit lets a member earn a better rate by committing money for a set time — and gives the SACCO stable funds to lend.

By the SaccoMonitor team · Updated · 6 min read

The key terms of a fixed deposit

TermMeaning
AmountThe money placed on deposit.
RateAnnual interest rate, fixed for the whole term when the deposit is opened.
TermHow long the money is committed, in months.
Maturity dateThe end of the term.
Maturity instructionRenew, pay into savings, or hold for collection.

Example

UGX 5,000,000 for 12 months at 10% a year earns 5,000,000 × 10% = 500,000 over the year. With the instruction “pay into savings”, the member’s savings account receives 5,500,000 on the maturity date and the deposit account closes.

Managing fixed deposits well

  • Record the rate on the deposit itself, so later rate changes do not affect existing deposits.
  • Lock the funds until maturity unless the product allows an early break, and state the penalty.
  • Act on maturity automatically — members should not have to chase their money.
  • Keep fixed deposits in their own ledger account so the balance sheet shows them separately from ordinary savings.

SaccoMonitor does each of these — see SACCO savings management.

Frequently asked questions

Money a member places with the SACCO for an agreed term, such as 6 or 12 months, at an agreed interest rate. It cannot normally be withdrawn before the end of the term.

The interest is paid, and the deposit is either renewed for another term, moved into the member’s savings account, or held for the member to collect — according to the instruction given when it was opened.

Only if the SACCO’s product allows it. The usual condition is that interest not yet paid is forfeited.

Related pages

Savings & fixed deposits in SaccoMonitor

Locked rates, maturity and payout.

How savings interest is calculated

Daily-balance and minimum-balance methods.

SACCO glossary

Key terms explained.

See it working in SaccoMonitor

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