The study sought to assess the suitability of groundwater for domestic and drinking purposes in the Effutu Municipality of Ghana. The paper employed laboratory protocols to analyse the water quality parameters’ concentrations for groundwater samples collected from wells. Descriptive statistical analysis was used to analyse the data and the concentrations of parameters compared with the World Health Organisation’s (WHO) permissible limits. Principal component analysis using the varimax rotation was employed to explore the main parameters which express groundwater quality in the municipality. Water quality index employing the weighted arithmetic method was also used to score groundwater suitability for domestic and drinking purposes. The study found that the main parameters determining groundwater quality in the Effutu Municipality are conductivity, total dissolved solids (TDS), salinity, hardness, chloride, calcium, magnesium, and sodium. Except for conductivity, manganese, TDS, total hardness, and calcium, the average concentrations for all studied water quality parameters were within limits proposed by WHO. The study further revealed that 48.15%, 44.44%, and 7.41% of the groundwater had excellent, good, and poor water quality indices, respectively. The investigation so advances that the groundwater resources of the Effutu Municipality are suitable for domestic purposes. Despite this, we recommend that abstracted groundwater should be treated by prioritizing the water quality parameters.