Kenyans saving through money market funds need to pay attention. Your money is still earning interest, but the returns are getting smaller.

For thousands of Kenyans who have turned to money market funds (MMFs) to grow their savings, a new development deserves attention.

According to Business Daily, the average annualised return across the money market funds it tracked fell to 9.3% by October 15, 2026, down from 9.9% a year earlier.

The difference might look small on paper. But when you are trying to grow your savings, every percentage point matters.

How much money are you actually earning?

Suppose you have KSh 100,000 sitting in a money market fund.

At an annual return of 9.9%, you would earn approximately KSh 9,900 over a year.

At 9.3%, you would earn approximately KSh 9,300.

That is a difference of KSh 600 annually on every KSh 100,000 invested, assuming the same amount remains invested throughout the year and ignoring taxes, fees and compounding.

Now imagine you have KSh 500,000 invested. That difference rises to KSh 3,000 a year.

For someone with KSh 1 million, it becomes KSh 6,000.

The lesson? Small changes in investment returns can have a meaningful impact when you are dealing with large amounts of money.

Why are MMF returns falling?

Money market funds invest in short-term interest-bearing instruments, including Treasury bills, bank deposits and other eligible securities.

When interest rates on these instruments decline, fund managers may eventually earn less from new investments. That can translate into lower returns for investors.

This is why the return you received last year may not be the return you receive this year.

An MMF is not a fixed-rate deposit promising the same interest throughout your investment period. Its yield can change with market conditions.

Should you withdraw your money?

Not necessarily.

Money market funds remain useful for emergency savings, short-term financial goals and money you may need relatively quickly.

However, this is a good time to ask three questions:

1. What is my fund’s current effective annual yield?

Do not rely on an old advertisement, a past performance figure or what someone shared in a WhatsApp group.

2. Am I comparing funds fairly?

Look at comparable returns, fees, withdrawal terms, investment policies and regulatory status. The highest advertised yield alone does not tell the whole story.

3. Does my investment match my financial goal?

Money you may need next month has a different purpose from money you can invest for five or ten years. Long-term wealth building may require a diversified investment strategy rather than relying entirely on MMFs.

The bigger lesson about money

One of the biggest mistakes investors make is assuming that a popular investment will always deliver the same returns.

It will not.

Markets change. Interest rates change. Returns change.

The goal should not simply be to chase whichever fund advertises the highest yield. It should be to understand where your money is invested, what you are earning after costs and taxes, and whether that return is helping you achieve your financial goals.

Your money should have a plan, not just a place to sit.