How Money Market Funds Work in Kenya
A money market fund (MMF) pools money from many investors and invests it in low-risk, short-term assets such as government securities (like T-bills) and bank deposits. You own "units" in the fund, and the fund pays you interest.
MMFs in Kenya are regulated by the Capital Markets Authority (CMA). Each fund's assets are held by an independent custodian, separate from the fund manager.
How you earn interest
Interest is calculated daily and usually credited monthly. If you leave it in the fund, next month's interest is earned on a bigger balance: that's compound growth.
Interest is subject to 15% withholding tax, deducted before it reaches your account. For resident individuals this is generally a final tax.
Worked example
You invest KSh 100,000 in a fund yielding 10% a year:
| Annual yield (after fund fees) | 10.00% |
| Less 15% withholding tax | −1.50% |
| Net yield | 8.50% |
| Value after 12 months | KSh 108,500 |
Use the table above to see this for every fund, with your own amount and period.
Money market funds vs Treasury bills
| MMF | T-bill | |
| Minimum | From about KSh 100 | KSh 50,000 |
| Access to money | Withdraw anytime (usually 1–3 working days) | Held until maturity |
| Interest rate | Changes daily | Fixed when you buy |
| Tax | 15% withholding | 15% withholding |
Want to lock in a fixed rate? Use our T-bill calculator to see your net return after tax.
How to choose a fund
- Compare yields on the same basis. Check whether a quoted yield is before or after management fees.
- Check the minimum and any top-up minimum.
- Check withdrawal time. It varies by fund.
- Look at the fund's size and track record, not just this week's rate.
- Confirm it's CMA-approved on the CMA website.
Frequently asked questions
Is my money guaranteed? No. An MMF is an investment, not a bank deposit. Returns aren't guaranteed, though MMFs are among the lowest-risk investments available.
Why do yields change? Yields follow the rates on the assets the fund holds, especially T-bill rates. When CBK rates fall, MMF yields usually follow.
How often is this table updated? Weekly. Check the "as at" date above the table.