A money market fund pools money from many savers and invests it in short-term, lower-risk paper: Treasury bills, bank deposits and similar. You buy units, the fund earns interest, and you can usually withdraw within a few days. In Kenya, funds are licensed and supervised by the Capital Markets Authority.
The two yields you will see
- Daily yield: what the fund earned yesterday, expressed as a yearly rate.
- Effective annual yield: the same, but assuming the interest stays in and earns interest too (compounding). It is the one to compare.
Both describe recent performance. Neither is a promise of what the fund will pay.
Tax
Interest from a money market fund carries 15% withholding tax for Kenyan residents. A fund showing 10.76% leaves you about 9.15% after tax. Our tables show both: money market funds ranked.
Risks and checks
- Not a bank deposit. The value of your units can fall if something the fund holds goes wrong. It is low risk, not no risk.
- Fees. Management fees come out of the return; some funds quote yields before fees.
- Stale figures. A yield far above the Treasury bill usually means riskier holdings, or a figure that has not been updated. Our table flags yields that have not changed for a week.
- Access. Withdrawals take days, not minutes. Keep emergency money somewhere you can reach at once.
Information, not advice.