How to Invest in KCB Money Market Fund in 2024

Since interest rates have risen in the past three years, money market fund accounts, of which KCB Money Market Fund is a type, have become more appealing to investors in Kenya;

KCB Money Market Fund is a money market fund account owned and operated by KCB Bank Kenya Limited, which, by asset value, according to Statista, was the largest bank in Kenya as of 2023.

How does the KCB Money Market Fund work?

Typically, the KCB Money Market Fund is a mutual fund that invests in short-term, higher-quality securities like Treasury bills or T-Bills, repurchase agreements, certificates of deposit and commercial paper, among other cash-equivalent securities.

“The KCB Money Market Fund is a low-risk investment option that pools funds from multiple investors to invest in highly liquid, interest-earning securities,” the fund manager, KCB Bank, says.

For that, the fund is designed to offer a safe, stable investment option for investors looking for a low-risk investment that offers relatively easy access to their money.

That said, its investment objective is to preserve capital, maintain liquidity and produce a competitive yield as interest income, distributed each month as dividend payments to the investors.

What is the interest rate for the KCB Money Market Fund in 2024?

KCB Money Market Fund offers a competitive annual percentage yield (APY) of 15.34% as of August 13, 2024, down from a return rate of 15.90% in July after the Central Bank of Kenya (CBK) dropped its key lending rate to 12.75% from 13%. The APY will vary and may change at any time because the fund’s income is based on short-term interest rates—which can fluctuate significantly over short periods.

The minimum amount needed to open a KCB Money Market Fund account is Ksh5,000, with neither a minimum regular monthly payment nor a minimum balance to maintain in the account. However, the money you keep in the account is subject to 2% management fees and a 15% Withholding Tax on interest earnings, as per government regulations.

What is needed to open a KCB Money Market account?

To start investing in the KCB Money Market Fund, you need to open an account. However, you cannot open it online. Because of that, you must visit a KCB Bank branch near you to get assistance in registering one.

When you visit the KCB Bank branch, you’ll need to provide:

* A copy of your National ID copy
* KRA PIN certificate
* A passport-size photo
* The minimum initial investment of Ksh5,000

At the bank’s branch, a client service representative will tell you more about the fund if you need more details or clarification before they can give you the KCB investment account application form to fill out for account opening.

It takes a few minutes to open the KCB Money Market Fund account.

Is KCB Money Market Safe?

KCB Money Market Fund is a safe, low-risk investment. Moreover, because KCB Bank, its fund manager, has a long history of strong performance, rest easy knowing your cash in the fund is secure as its execution quality is among the best in the business.

Furthermore, the fund is registered and regulated by the Capital Markets Authority (CMA), and the bank is licensed as a commercial bank by the Central Bank of Kenya.

But remember, while the KCB Money Market Fund is designed to be a low-risk investment, all investments carry some level of risk. Always consult with the KCB Investment team to ensure this investment aligns with your financial goals and risk tolerance, KCB Bank advises.

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