First, we shall begin by explaining to you what money market funds in Kenya are as well as include the best performing money market fund in Kenya list.
Money market accounts are a good investment if you are looking to earn more interest than what your savings account provides. It is also a safe way to grow your money.
A money market fund only invests in highly liquid instruments such as cash, cash equivalent securities as well as high credit rating debt-based securities with a short-term, maturity—less than 13 months.
In Kenya, the interest of between 4% and 10% is paid out annually depending on the money market fund.
How to choose money market funds in Kenya
It’s pretty simple really, all you need to do is pick a company, insurance or bank that best offers what you are looking for as well as also gauge on their interest rates. Other factors to consider while looking into opening a money market account in Kenya are as follows:
- Interest rates: One of the biggest draws of opening a money market account is if the company offers high-interest rates that are 100% guaranteed. Now that would be an ideal deal.
- Withdrawal limitation: Different money market funds have different limitations on withdrawals. It is best to check on these rules and regulations before you commit to a particular company.
- Fees: Read all the fine print before you commit to any particular money market fund. Make sure you ask questions about associated charges as well as bank fees.
- Stability and Risk: some money market funds run a higher risk than others, but generally, most funds are typically conservative and safe. Choose a company that has proven stability, low affinity for risk and is heavily regulated by CMA by doing thorough research.
- Minimum balance: What you need to do while choosing a money market fund is to make sure that their minimum balance requirement meets your affordability. Choose a fund that will not charge you if you go under the minimum requirements. Most money funds do not, however, have low or minimum balance requirements but it is always best to do your due diligence to caution you.
- Withdrawal terms: You need to choose a fund which is clear on their withdrawal terms. Most funds require a 3-5 day withdrawal notice before you can access your funds.
Companies that deal with money market funds in Kenya
We shall now take you through the different companies that offer money market funds in Kenya as well as what it takes to invest in them.
- Zimele Market Fund
- Sanlam Money Market Fund
- CIC Money Market Fund
- Cytonn Money Market Fund
- Britam Money Market Fund
- CBA Group Money Market Fund
1. Zimele Money Market Fund
The Zimele fund is flexible, convenient and allows you to save according to the pace that you choose. In other terms, it’s also called a ‘savings plan’.
This fund pools members contributions and invests them in safe high-yielding interest-bearing assets such as Treasury bills, Treasury bonds and fixed deposits
The Capital Market Authority (CMA) licences and regulates this fund.
Features and Benefits:
- You require a minimum deposit of Ksh. 100
- The fund offers competitive interest rates and enhanced generally keeps the funds safe
- There are no hidden charges while dealing with this fund.
- You have an option of using M-Pesa for deposits (paybill number 501101) and withdrawals
- The interest is compounded annually
- You can request for online statements
- No minimum balance requirement
The Zimele Savings Plan is Ideal for:
- Building up savings for emergencies.
- Building up savings for groups and investment clubs (Chamas).
- Build up savings for your children’s needs such as education, childcare, healthcare, etc.
- Managing your business’s surplus funds.
- Saving money for short-term financial needs such as holidays, household goods, etc.
- Saving for long term goals such as weddings.
2. Sanlam Money Market Fund
The fund aims to deliver a higher level of income as opposed to average banks fixed deposit accounts.
The fund like many others invests in money market securities including higher yielding
fixed and call deposits, treasury bills and investment grade commercial paper.
The maturity of this specific fund is usually less than one year after investing in money market instruments.
Benefits of Sanlam fund
- The fund gives higher returns as opposed to banks fixed deposits.
- Sanlam cautions clients against market volatility.
- The fund is an advantage if you want to save funds for an emergency later or ‘nest egg’.
3. CIC Money Market Fund
The CIC Money Market fund is a low-risk fund which invests in diversified near cash, interest-bearing instruments in the Kenyan market.
The fund invests in high-quality interest-bearing investments, fixed deposits, and near cash holdings in the Kenyan Market.
If you are an investor looking for a place to store away funds with low-risk, this is definitely the fund for you.
Key benefits of the CIC money market fund
- Liquidity: You can withdraw your funds at short notice with no penalty fees.
- Flexibility: You can switch or transfer funds to another fund that you may have with CICAM.
- Security: The fund invests in government paper and liquid instruments.
- Competitive Returns: Interest is calculated daily and credited at the end of each month. The fund benefits from placing deposits in large sums as such is able to negotiate for competitive rates.
- Professional fund management: Clients benefit from seasoned professionals with expertise in the sector.
4. Cytonn Money Market Fund in Kenya
Cytonn Money Market Fund (CMMF) is your ideal investment plan if you are looking to save up to meet goals in the near future.
CMMF invests in high-quality interest-bearing investments, fixed deposits, and near cash holdings in the Kenyan market.
Features of the Cytonn fund
- If you decide to start investing in this fund, no entry or exit fee is charged.
- Your initial starting capital will remain safe.
- The rates are based on the current market, this means that they are highly competitive.
- For first time investors, it is pretty easy to start off in this fund
You can download the application form here.
5. Britam Money Market Fund in Kenya
This is your ideal market fund to invest cash that you need to save up for short term goals. These short term goals may include, school fees, wedding savings, construction projects, holiday planning chama investments, deposits on cars/mortgage/land and also family welfare funds.
Bitam’s fund requirements are pretty simple. This include
- You need a mobile phone, a national ID card/Passport and Ksh 1,000 on your MPesa account to start investing.
- You will manage all account features on your phone, this includes deposits, withdrawals and investments.
- Clients can also top up your account anytime using your MPesa account.
6. CBA Group Money Market Fund in Kenya
The CBA fund invests in fixed deposits, interest-bearing investments and near-cash holdings in the Kenyan market.
If you are a low-risk investor, then this CBA fund is definitely for you especially if you prefer stability and security at the same time. It is also ideal during times of stock market turbulence.
- No joining fee is required.
- Interest is calculated on a daily basis and credited to the client’s account monthly.
- To maximise investment returns, one has the option to reinvest into the fund.
- Ksh. 5,000 is the minimum investment for each CBA unit Trusts Funds.
- Ksh. 5,000 is the minimum additional investment amount.
- A service fee of 2% p. a. applies.