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Guide To Investing In Kenyan Money Market Funds In 2024

A money market fund (MMF) is a type of mutual or unit fund that invests in short-term, low-risk debt securities. These funds are designed to give investors a relatively stable investment option to preserve capital and provide modest returns. Investment companies, banks, and brokerage firms typically offer money market funds.

In Kenya, money market funds are regulated by the Capital Markets Authority (CMA). They invest in various instruments such as government Treasury bills, commercial paper, certificates of deposit (CDs), repurchase agreements, and short-term corporate debt.

These investments are known for their short maturity periods, typically ranging from a few days to one year, which helps maintain liquidity and reduces the risk of interest rate fluctuations. It’s also essential to note that money market funds are subject to a 15% withholding tax, which is remitted to the Kenya Revenue Authority (KRA) monthly.

Investors often turn to money market funds as a cash management tool or a short-term parking place for funds that are not immediately needed, such as setting up emergency and sinking funds.

These funds offer easy access to the invested capital, allowing investors to redeem their shares and access their funds quickly. MMFs generally offer better returns than the fixed deposit accounts provided by banks, as their interest is compounded.

While money market funds are considered low-risk investments, they are not guaranteed by the government or the fund provider. There is still a possibility of losing money in a money market fund, although the likelihood is relatively low compared to higher-risk investments.

To maximize returns in an MMF, one should invest consistently and be patient. Before investing in a money market fund, investors should carefully review the fund’s prospectus to understand its investment objectives, fees, and risks. It’s also recommended to consult with a financial advisor to determine if a money market fund aligns with their investment goals and risk tolerance.

Several companies offer MMFs in Kenya, such as banks, brokerage firms, and insurance institutions. While choosing an MMF, ensure that the fund aligns with your saving goals and lifestyle.

It is also essential to consider factors such as credibility, customer service, withdrawal duration, initial deposit, top-up, annual management fee, etc.

Apart from the competitive compound interest returns, different money market funds offer other value-added services such as customer portals, apps, monthly statements, and savings calculators, to mention a few. Below are some MMFs to consider in 2024:

  1. Cytonn Money Market Fund
    • Annual Interest Rate: 10.8%
    • Initial Minimum Investment: Kes 100
    • No Minimum Top-up Amounts
    • Annual Management Fee: 2%
    • Withdrawals: Below 300k via MPESA on the same day, above 300k to bank within 2-4 working days
  2. Kuza Money Market Fund
    • Annual Interest Rate: 10.62%
    • Initial Minimum Investment: Kes 5,000
    • Minimum Top-up Amount: Kes 1,000
    • Annual Management Fee: 2%
    • Withdrawals: Processed within 3 working days
  3. Genghis GenCap Hela Imara Money Market Fund
    • Annual Interest Rate: 10.4%
    • Initial Minimum Investment: Kes 500
    • Minimum Top-up Amount: Kes 500
    • Annual Management Fee: 2%
    • Withdrawals: Processed within 2-4 working days
  4. Dry Associates Money Market Fund
    • Annual Interest Rate: 10.08%
    • Initial Minimum Investment: Kes 1,000,000
    • Minimum Top-up Amount: Kes 250,000
    • Annual Management Fee: 2.48%
    • Withdrawals: Processed within 3 working days
  5. NCBA Money Market Fund
    • Annual Interest Rate: 9.8%
    • Initial Minimum Investment: Kes 5,000
    • Minimum Top-up Amount: Kes 5,000
    • Annual Management Fee: 2%
    • Withdrawals: Processed within 3 working days
  6. UAP Old Mutual Money Market Fund
    • Annual Interest Rate: 9.7%
    • Initial Minimum Investment: Kes 1,000
    • Minimum Top-up Amount: Kes 1,000
    • Annual Management Fee: 1%
    • Withdrawals: Processed within 3 working days
  7. Nabo Capital Money Market Fund
    • Annual Interest Rate: 9.6%
    • Initial Minimum Investment: Kes 100,000
    • Minimum Top-up Amount: Kes 10,000
    • Annual Management Fee: 1.5%
    • Withdrawals: Processed within 2 working days
  8. Sanlam Money Market Fund
    • Annual Interest Rate: 9.57%
    • Initial Minimum Investment: Kes 2,500
    • Minimum Top-up Amount: Kes 1,000
    • Annual Management Fee: 1.2%
    • Withdrawals: Processed within 3 working days
  9. Zimele Money Market Fund
    • Annual Interest Rate: 9.56%
    • Initial Minimum Investment: Kes 100
    • No Minimum Top-up Amount
    • Annual Management Fee: 2%
    • Withdrawals: Processed within 3 working days
  10. CIC Money Market Fund
    • Annual Interest Rate: 9.5%
    • Initial Minimum Investment: Kes 5,000
    • Minimum Top-up Amount: Kes 1,000
    • Annual Management Fee: 2%
  11. APA Apollo Money Market Fund
    • Annual Interest Rate: 9.4%
    • Initial Minimum Investment: Kes 1,000
    • Minimum Top-up Amount: Kes 1,000
    • Annual Management Fee: 2%
    • Withdrawals: Processed within 3 working days
  12. Madison Money Market Fund
    • Annual Interest Rate: 9.3%
    • Initial Minimum Investment: Kes 5,000
    • Minimum Top-up Amount: Kes 1,000
    • Annual Management Fee: 2%
    • Withdrawals: Processed within 3 working days
  13. ICEA Lion Money Market Fund
    • Annual Interest Rate: 8.9%
    • Initial Minimum Investment: Kes 500
    • No Minimum Top-up Amounts
    • Annual Management Fee: 2%
    • Withdrawals: Below 10k processed on the day of request, above 10k processed within 2-4 working days
  14. Britam Money Market Fund
    • Annual Interest Rate: 8.9%
    • Initial Minimum Investment: Kes 1,000
    • Minimum Top-up Amount: Kes 1,000
    • Annual Management Fee: 1.5%
    • Withdrawals: Processed within 2 working days

N/B: The interest rates fluctuate depending on the market rates.

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