The Kenyan economy has been on the rise for the last few years. As a result, people are earning more and there is increasing demand for money market funds in Kenya. The increased demand has led to an increase in competition among companies that offer these types of funds. This article will provide information about what money market funds are, how they work, and which ones are best suited for you!
Here are the 10 best money market funds in Kenya:
- Britam money market fund
- ICEA Lion money market fund
- CIC money market fund
- Cytonn money market fund
- UAP Old Mutual money market fund
- Zimele money market fund
- Nabo Africa money market fund
- Sanlam money market fund
- Genghis Capital money market fund
- Stanlib money market fund
What is a Money Market Fund?
A money market fund is a form of a Unit Trust that invests in short-term, low-risk securities (i.e., cash savings). The aim of a money market fund is to generate a high rate of Return on Investment (ROI). This means that it is similar to saving in an account at your bank. However, this type of fund offers more liquidity by allowing you to withdraw money whenever needed without penalty fees or loss of interest.
How do Money Market Funds Work?
There are two types of money market funds; fixed-income and variable-income. Fixed income means that the fund invests in low-risk securities (i.e., cash savings). A fixed income money market fund will generally pay a higher rate than your standard bank account but it is not liquid. This means that you cannot withdraw your money whenever needed.
On the other hand, variable income money market funds are similar to equities in that it invests in stocks and bonds which may fluctuate with changes in stock prices. The rate of return on this type is lower than fixed-income but offers more liquidity since withdrawals can be made at any time.
1. Britam Money Market Fund
This is one of the best money market funds in Kenya. Apart from saving and investing, the Britam money market fund will help you in planning life financial goals.
Britam can help you set up an emergency fund, save for school fees of business. If you have different saving goals, you can visit their offices for advice on the best Unit Trust for you.
Benefits of Britam Fund
- Earn between 8 to 10% interest annually.
- Offer easy access through USSD *778#
- Easy sign up through MyBritam App. You can download this app from both Play store and App store. Moreover, the app can be accessed from the Britam portal.
- You can easily track your savings and transactions via MyBritam app.
- Higher returns compared to a bank’s fixed deposit savings account
Contact: 0705 100 100
2. ICEA LION Money Market Fund
ICEA LION offers one of the most affordable money market funds in Kenya. After setting up your money market at ICEA LION, you can top up with any amount you wish at any time you feel like. This fund gives you an opportunity to save for different goals under one platform. Therefore, despite your saving goal, your needs will be catered for at the ICEA LION money market fund.
Benefits of ICEA LION Fund
- The fund is liquid, therefore, you can access your funds easily whenever you need it.
- It’s affordable. You only require Ksh. 500 to set up your money market.
- It’s highly transparent and properly governed
- Provides an opportunity for people to save for multiple goals under one platform.
- Offers professional investment management.
Contact: +254 (0) 20 2750000
3. CIC Money Market Fund
CIC fund invests in highly liquid near-cash interest-bearing instruments. This fund will be ideal for you if you want to earn daily interest on your low-risk investment, preserve your capital, invest for a period of less than 1 year. It also offers a safer place where you can put your funds for future projects because you can easily withdraw the money at any time.
Features and Benefits
- You need a minimum of Ksh. 5,000 to invest in this fund.
- Additional deposit is fixed at Ksh. 1,000
- No initial fees
- You must provide a short notice of between 2-4 working days to access your money.
- Highly liquid and secure
Location: CIC Plaza, Mara Road, Upperhill Nairobi, Kenya
Contact: +254 703 099 120/020 282 3000
4. Cytonn Money Market Fund
This fund is part of Cytonn Asset Managers Limited, an affiliate of Cytonn Investments. The fund invests in high-quality interest-bearing investments, fixed deposits, and near cash holdings in the Kenyan market.
If you are looking to improve your savings or keep some cash to be used for short-term goals, then the Cytonn money market fund is for you.
Features and Benefits
- No initial fee for those opening money market fund at CMMF
- Your invested amount will earn a daily compound interest
- No need to worry about your capital as it’s always safe here
- The daily interest rates are calculated based on the prevailing markets. Therefore, this is a highly competitive money market fund.
- If you are a first-time investor, CMMF offers the best starting point as they provide guidance on how and where to keep your money.
Location: 6th and 7th Floor, The Chancery, Valley Road, Nairobi, Kenya
Contact: +254(0) 709 101 200
5. UAP Old Mutual Money Market Fund
As one of the best money market funds in Kenya, UAP old mutual fund provides the right solutions for its clients. The funds allow you to use direct debit, M-Pesa, Cheques, or standing orders to make contributions. Moreover, you can use the same avenues for withdrawals.
Features and benefits
- You are at liberty to make one free monthly withdrawal
- Sign-up freedom for those above 18 years
- You can move from one investment fund to another. For instance, from money market fund to equity fund.
- You can open the money market fund with a minimum of Ksh. 1,000 and monthly contributions of at least Ksh. 1,000.
- You can get a loan using your investment portfolio.
- No fixed investment period here. However, you are advised to invest your money for 2-3 years.
- You will not be charged during registration
- You are guaranteed of monthly statements
- They offer daily interests on your investment which is allocated monthly.
- You will get monthly advice on progress and how to keep expanding your investment.
Location: UAP Old Mutual Tower, Upper Hill Road, Nairobi
Contact: +254 20 2850 000
6. Zimele Money Market Fund
This is a flexible money market fund in Kenya. The fund pools money from investors which is then invested safely in high-yielding interest-generating assets. Zimele money market fund invests in assets such as treasury bonds, treasury bills, and fixed deposits.
Features and Benefits
- The fund offers a safe place to invest your money as it is regulated and licensed by the Capital Market Authority (CMA).
- Zimele allows the least deposit in Kenya at Ksh. 100
- Interest is calculated based on the prevailing markets to ensure competitiveness.
- No need to travel to the office as you can use the M-Pesa paybill option to make deposits. To do so, use the M-Pesa Paybill number 501101.
- You can as well withdraw your money through M-Pesa.
- The interest earned by your money is compounded yearly.
- You can access online statements to see how your investment is doing.
Location: Ecobank Towers, 7th Floor, Muindi Mbingu Street, Nairobi.
7. Nabo Africa Money Market Fund
Nabo Africa is among the money market funds in Kenya that seek to maximize your current income by investing in different portfolios. If you want your income to experience an optimal return, you are advised to invest it here for at least 3 months.
Contact: +254 709 902 700
8. Sanlam Money Market Fund
Sanlam’s investment objective is capital preservation. With high security at this fund, you are assured that your money is in a safe place. If you want to invest your money for a period between one year and below, then the Sanlam money market fund is ideal for you. You can make both regular or one-off savings.
Features and Benefits
- High security for invested money
- You can access your funds eaily and quickly
- Offers consistent returns while managing risks
- When you invest here, your money will earn daily interest which will be compounded monthly.
- You need a minimum of Ksh. 2,500 to start investing in this money market fund.
- It’s a good investment option for individual, joint investors, and corporates.
- You are at libity to decide your investment period
- This is a low-risk fund with a risk rating of 0-1.6
Contact: +254 (0)20 496 7000/+254 719 067000/+254 722 207 842/+254 733 207 842
9. Genghis Capital Money Market Fund
This is a Collective Investment Scheme (CIS). This money market fund is ideal for you if you are looking for an investment plan with very low risks associated.
Features and Benefits
- Minimum nvestment amount of Ksh. 500
- Interest earned on your investment is calculated daily and credit into your account each month.
- Investments are made in short-term secure investments
- You can access your money any time you wish to as this fund is highly liquid.
Contact: +254 709 185 000
10. Stanlib Money Market Fund
Stanlib fund is among the money market funds in Kenya that focuses on the needs of investors. To achieve this, the Stanlib money market fund provides sufficient choice without complexity to its customers.
This money market fund aims to maximize income while ensuring that capital is preserved. In this way, the company ensures liquidity for the invested money. The Stanlib money market invests in diverse and highly marketable short-term securities like treasury bonds and corporate financial instruments.
To invest in this fund, you need a minimum capital of Ksh. 10,000 and a minimum additional deposit of Ksh. 5,000.
Which Money Market Funds are Best Suited for You?
When you’re looking to earn a high rate of ROI, it is important to choose the right money market fund. This will depend on your liquidity needs and tolerance to risk. If you need flexibility in when and how much money can be withdrawn, then go with variable income type funds. If you need a high rate of ROI with low liquidity, then fixed-income is the best option for you!
Advantages of Money Market Funds
- Generate a high rate of return on your money.
- Offer more liquidity than savings accounts (i.e., withdrawals can be made any time without penalty fees).
Disadvantages of Money Market Funds
- Less flexibility in when and how much you withdraw. This is because the purpose for money markets is to make interest, not transactional use.