A money market fund (MMF) is a type of mutual fund that invests in low-risk, short-term debt instruments like bank deposits, repurchase agreements, Treasury Bills, high-quality corporate commercial paper and other near cash holdings.
In the past few years, money market funds have gained a reputation as a profitable alternative to regular savings accounts, especially since the Central Bank of Kenya (CBK) raised its benchmark rate to 13% to cool the pace of rising prices of basic commodities after inflation surged.
When the central bank increases its rate, banks raise annual percentage yields on savings accounts to attract new customers. This puts competitive pressure on other financial institutions, such as money market fund managers, who adjust to pay more interest on their high-yield accounts to entice prospective investors.
> Top 5 Best Money Market Funds in Kenya
That said, it means that the best money market funds are those that are highly profitable, paying investors the highest interest rates in the current higher rate environment:
Our pick of the best money market funds in Kenya – 2024
To help investors identify the best money market funds in 2024, our team ranked the top 10 best money market account rates in the country as listed below in order of their interest rates;
| Rank | Money market fund | Nominal rate | Real rate |
| 1 | Etica MMF | 18.36% | 13.11% |
| 2 | Cytonn MMF | 18.34% | 13.09% |
| 3 | Lofty Corban MMF | 18.28% | 13.04% |
| 4 | Kuza MMF | 17.83% | 12.61% |
| 5 | GenAfrica MMF | 16.85% | 11.67% |
| 6 | Nabo Africa MMF | 16.66% | 11.59% |
| 7 | GenCap Hela Imara MMF | 16.33% | 11.17% |
| 8 | Jubilee MMF | 16.12% | 10.97% |
| 9 | Enwealth MMF | 15.94% | 10.80% |
| 10 | Mayfair MMF | 15.60% | 10.47% |
With money market funds offering investors money market returns and liquidity while providing the economic benefits of a pooled investment, the amount of income that a shareholder may receive is largely dependent on the real rate calculated after deducting applicable taxes and fund management fees.
Having that in mind, the above top 10 best money market funds in Kenya pay the highest returns in the country, with the Etica Money Market Fund leading as the number one MMF with a record after-tax interest rate of 13.11%, followed by the others.
The minimum investment of Etica Money Market Fund is Ksh100, but you should remember that investing large amounts can potentially earn you more returns. However, like every other investment, money market funds carry a varying degree of risk, and it is important to understand that, based on many economic factors, the value of your investments can go up as well as down, and you may get back less than you invest.
