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Top 5 Best Money Market Funds in Kenya (2024)

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The “money markets” are a financial segment where assets with brief maturity periods provide a relatively near-stable and high market-driven rate of returns to investments.

Money market funds belong to the money markets. They are a type of mutual fund that invests in high-quality, low-risk securities such as government treasury bills, bank certificates of deposit, repurchase agreements, and commercial papers that can be converted into cash almost immediately and are safe to guarantee capital preservation.

The maturities of assets in money market funds range from days to a year, and the interest income earned through that time can be withdrawn on short notice as most of them are calculated and paid out daily or weekly.

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Money market funds are a good option for investors wanting stability and liquidity because they offer investors a low-risk way of earning interest after a short time.

Generally, returns on money market deposit accounts are strongly linked to interest rates, higher interest rates, so the best ones pay higher yields.

In Kenya today, assets in money market funds are at all-time highs after the Central Bank of Kenya (CBK) raised its base lending rate to 13%. That positively affected the value of investments and income from this type of mutual fund.

However, that does not mean that all money market fund providers currently have high rates that are almost standard because, aside from the returns fluctuating with day-to-day inflation and other economies of scale, the yields are also dependent on the respective fund manager’s expertise.

To help you get the best money market fund accounts you can open right now, here are the top 5 that have the highest yields as of May 2024:

Today’s top 5 money market account rates in Kenya

What are the best money market fund accounts with the highest rates in 2024? Luckily, it is easy to find those top-paying accounts –

Our Editorial Team analyzed all high-paying money market fund accounts today and produced this list of the Top 5 Best Money Market Funds with updated rates in Kenya. Check them out:

No. Institution Nominal rate Real rate (APY)
1. Lofty-Corban Money Market Fund 18.27% 12.64%
2. Etica Money Market Fund 18.21% 12.58%
3. Cytonn Money Market Fund 17.03% 11.46%
4. GenAfrica Money Market Fund 16.93% 11.36%
5. Nabo Money Market Fund 16.66% 11.10%

The annual percentage yield (APY), put as the ‘real rate’ in the table above, is the effective rate of return of the money an investor puts in a money market fund account.

Between the nominal rate and that APY, almost all firms in the country with clients’ assets under its management charge management fees that, mostly, do not cross three per cent.

In that case, for example, the fund management fee of the best-performing MMF in Kenya, Lofty-Corban Money Market Fund, is 2.74%, Etica charges 2.73%, for Cytonn Money Market Fund, it is 2.55%, and GenAfrica’s annual management fees is 2.54%.

What are the minimum deposits of these best-performing MMFs in Kenya?

As seen in the list of the top 5 best money market funds in Kenya, Lofty-Corban Money Market Fund comes first with an annual yield rate of 12.64%, slightly above Etica Money Market Fund, which comes second with an interest rate of 12.58% before the others follow;

Despite that, the minimum opening deposit for a money market account with Etica is lower, Ksh100, than Lofty-Corban’s Ksh1,000.

But of the five Kenya’s best MMFs (Cytonn also charges a Ksh100 minimum opening deposit like Etica), GenAfrica and Nabo Money Market Fund have the highest minimum investment amounts of Ksh500,000 and Ksh100,000, respectively.

*Note:
Here are some facts about money market funds in Kenya

* On average, the rates of most money market deposit accounts are between 8 and 9.2% real returns after tax, and the above top 5 of best performing MMFs pay above this
* For optimal return impact on your invested capital, most money market funds recommend a 3-month lock-in period
* You can open and manage these money market funds on your phone, as withdrawals and deposits are via Mpesa
* The opening deposit of a GenAfrica Money Market Fund account is Ksh500,000 and not Ksh1,000
* The chief regulator of MMFs in Kenya is the Capital Markets Authority, but all fund managers have different trustees and custodians

Other best-performing money market funds in Kenya are the Apollo Money Market Fund, Kuza Money Market Fund, Enwealth Money Market Fund, and KCB Money Market Fund, with impressive 10.83%, 10.65%, 10.64% and 10.37% annual yield rates, respectively.

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JUSTUS KIPRONO
JUSTUS KIPRONOhttp://www.businesstoday.co.ke
Justus Kiprono is a freelance journalist based in Nairobi, Kenya. He tracks Capital Markets and economic trends, infrastructure reform, government spending, and the financial impacts of state decision-making nationwide. You can reach him: [email protected]
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