How to withdraw savings from a SACCO

Many individuals have turned to Savings and Credit Cooperative Organizations (SACCOs) for their savings needs due to attractive benefits such as high interest rates and annual dividends. However, in times of unforeseen emergencies, navigating the process of withdrawing savings from a SACCO can be crucial. Here’s what you need to know on how to withdraw savings from a SACCO.
Procedure for Withdrawing Savings from a SACCO
When a member of a SACCO needs to withdraw their savings, they must adhere to a formal procedure outlined by the SACCO’s by-laws. This process ensures that withdrawals are managed efficiently while maintaining the SACCO’s financial stability.
- Formal Withdrawal Application: To initiate a withdrawal, members must submit a formal, signed letter to the SACCO management. This letter should include a copy of their ID and provide the SACCO with a sixty-day notice period, as stipulated by SACCO regulations.
- No Partial Withdrawals: SACCOs typically do not allow partial withdrawals of deposits. Members cannot withdraw only a portion of their savings or offset part of their deposits against outstanding loans unless they terminate their membership entirely.
- Instant Withdrawal Option: In cases where immediate access to funds is necessary, SACCOs do offer an option for instant withdrawal. However, this convenience comes with a cost. The SACCO charges a commission fee of 10% of the current deposit amount in lieu of the required sixty-day notice.
- Deposits Guaranteed for Loans: If a member has pledged their deposits as collateral or guaranteed another member’s loan, they cannot withdraw those deposits until the loan is fully repaid or the guarantorship is legally substituted.
For members, understanding these withdrawal procedures is crucial for financial planning and emergency preparedness. SACCOs, being member-owned and governed by cooperative principles, prioritize financial stability and equitable treatment of all members. This structured approach to withdrawals ensures that the SACCO can continue to serve its members effectively while safeguarding their savings.