Where Should Your Stokvel Invest Its Money? A Practical Guide To Growing Beyond The Savings Account

The South African stokvel economy moves an estimated R50 billion every year. Most of that money sits in savings accounts earning 4–6% per annum.

Inflation in South Africa has averaged above 4% annually over the last decade. That means most stokvels are, at best, treading water in real terms. Their members are not building wealth; they are preventing erosion.

The shift from saving to investing is not complicated. But it requires matching the right vehicle to the right group — because a burial society has completely different liquidity needs from a property syndicate, and getting that match wrong destroys value.

Here is the full landscape of options, ranked from most liquid and lowest risk to least liquid and highest potential return.

The Core Rule: Match Your Investment to Your Liquidity Need

Before choosing a vehicle, your group must answer one question honestly:

When do we need this money back, and what happens if we cannot access it?

The mistake most groups make is investing a burial society's funds in a 12-month fixed deposit and then having no cash when a member dies in month 3. Governance and investment strategy must be designed together.

Option 1: Money Market Accounts and Funds

Typical return: 7.5%–9.0% per annum (as of early 2026) Liquidity: High (T+1 to T+2 business days) Risk: Very low

A money market account (or money market unit trust fund) pools capital from many investors and places it in short-term, high-quality instruments: government treasury bills, bank call deposits, and short-term corporate paper. The fund is managed by professionals and maintains a near-constant net asset value (NAV) — you put in R10,000 and get R10,000 back, plus interest, at any point.

In the current rate environment, South African money market funds are returning between 7.5% and 9.0% per annum — well above both the basic savings account rate (typically 4–6%) and CPI inflation.

Best for: Burial societies (need liquidity for unexpected claims), grocery stokvels keeping funds through the year, and as the liquid portion of any scheme that needs operating cash on hand.

Examples: Allan Gray Money Market Fund, Coronation Money Market Fund, Sanlam Money Market Fund, Ninety One Money Market Fund — all available directly or via platforms like EasyEquities.

Tax note: Interest earned is taxable per member. Refer to SARS's interest exemption (R23,800 per individual under 65 per year) when assessing the group's net return.

Option 2: Fixed Deposits

Typical return: 8.0%–9.5% per annum (varies by term and institution) Liquidity: Low (funds locked for the agreed term) Risk: Very low

A fixed deposit locks your money at a guaranteed rate for a defined period — 6 months, 12 months, 24 months, or longer. The longer you commit, the higher the rate. Unlike a money market fund, a fixed deposit provides certainty: you know exactly what you will receive on maturity.

TymeBank currently offers up to 9.0% per annum on fixed-term deposits with no monthly fees — among the highest rates of any mainstream South African institution.

Best for: Grocery stokvels and savings clubs that accumulate contributions through the year and have a single defined payout date (e.g., December). Lock the full balance in January; collect in November.

Not for: Burial societies (cannot access funds when a death occurs), rotational stokvels (cannot make monthly payouts), or investment clubs with variable contribution schedules.

Practical structure: Open a transactional account (FNB, Capitec) for receiving monthly contributions. Once the balance is sufficient, sweep the accumulated funds into a fixed deposit. Keep a 2–3 month operating buffer in the transactional account.

Option 3: Unit Trusts (Collective Investment Schemes)

Typical return: 8%–14% per annum over a 3–5 year period (varies by fund type) Liquidity: Medium (T+3 to T+5 business days for redemption) Risk: Low to medium (depending on fund allocation)

Unit trusts pool investors' money into a diversified portfolio managed by a professional fund manager. Unlike a fixed deposit, unit trusts invest in real assets — shares, bonds, listed property — and the value fluctuates with the market.

Over a 3–5 year horizon, South African equity unit trusts have historically delivered real (above-inflation) returns. The caveat is volatility: in any 12-month window, a balanced unit trust might return -5% or +20%. For groups with short cycles, this is unacceptable variance. For investment clubs with a multi-year horizon, it is the cost of admission to superior long-term returns.

South African unit trust categories relevant to stokvels:

How to access: Unit trusts are available directly from asset managers (Allan Gray, Coronation, Ninety One, Sanlam, M&G) or through platforms like EasyEquities and EasyWealth. Group accounts for stokvels and investment clubs are supported.

Option 4: Exchange Traded Funds (ETFs)

Typical return: Tracks the underlying index (JSE All Share Index has returned an average of ~12–14% per annum over 10-year periods) Liquidity: High during market hours (traded on the JSE like shares) Risk: Medium (market risk)

An ETF is a passively managed fund that tracks a defined index. There is no fund manager making active decisions — the fund simply holds the shares in the index in proportion to their market weight. This makes ETFs low-cost and transparent.

The most widely held ETFs in South Africa include:

• Satrix 40 (STX40) — tracks the JSE Top 40 largest companies
• Satrix MSCI World (STXWDM) — global diversification through a JSE-listed ETF
• CoreShares S&P 500 (CSP500) — exposure to 500 US large-cap companies
• Ashburton 1200 (ASH1200) — exposure to 1,200 global companies

How to access for groups: EasyEquities operates a dedicated stokvel and investment club account (a "Group Account"). The account requires a minimum of two members, operates under a group mandate, and allows the group to buy and sell JSE-listed ETFs collectively. This is one of the cleanest solutions for investment clubs wanting market exposure without the complexity of setting up a full Pty Ltd structure.

Best for: Investment clubs with a 5+ year horizon and members who understand that short-term market volatility is part of the deal.

Not for: Burial societies, grocery stokvels, or any group that needs predictable access to funds within 12 months.

Option 5: JSE-Listed Shares

Typical return: Highly variable (individual share performance) Liquidity: High during market hours Risk: High (single-stock concentration risk)

Investing in individual shares rather than diversified funds amplifies both the upside and the downside. A group that bought Naspers shares in 2015 made extraordinary returns. A group that concentrated in a single property company during the 2020 pandemic did not.

For most stokvels, the diversification provided by an ETF is a better choice than stock-picking. If your group has genuine investment expertise and wants to run an actively managed portfolio, that is a legitimate strategy — but it requires that your constitution defines a clear investment mandate, a decision-making process (how does the group vote on buys and sells?), and clear unitisation rules so that members who join or exit at different times receive a fair allocation.

Option 6: Property (Direct or Syndicated)

Typical return: 8%–14% per annum (rental yield + capital appreciation, net of costs) Liquidity: Very low (cannot sell a fraction of a building) Risk: Medium to high (illiquidity, concentration, financing risk)

The property stokvel — and its more formal cousin, the property syndicate — deploys pooled capital to acquire real estate. This delivers rental income (passive yield) and capital appreciation on sale.

This is the highest complexity option and is not appropriate for savings groups that need regular access to their funds. It requires a dedicated legal structure (Pty Ltd), a Shareholders' Agreement, a functioning governance process, and a long investment horizon.

The existing guides on property syndicates in this blog series cover this in depth.

Matching Vehicle To Scheme Type: The Summary

The One Rule Nobody Follows (But Should)

Never invest in an asset whose liquidity profile does not match your payout obligations.

A burial society that puts its full reserve in a 24-month fixed deposit is one unexpected death away from not being able to pay a family when they need it most. An investment club that parks its capital in a money market account earns safe but below-potential returns for a decade.

The right answer is almost always a tiered structure:

• Keep 2–3 months of expected claims or payouts in an immediately accessible account
• Lock the remainder in the highest-yielding instrument compatible with your next major outflow

References:

• M&G Investments — Stokvels and Unit Trusts: Know the Difference
• Maya On Money — Finding the Right Investment for Your Stokvel
• EasyEquities — Setting Up an Account for Stokvels and Investment Clubs
• Absa Blog — Stokvels: From Saving to Investing
• SmartAboutMoney — What is a Money Market Fund?
• SARS — Interest and Dividends