Money Market Fund: 5 Easy Steps To Keep Your Money From Disappearing!

Are you looking for a safe place to put your money for a rainy day? In Kenya, there are 18 approved Money Market Funds out of the 25 companies licensed by the Capital Markets Authority (CMA). These can be confusing to new investors trying to choose the best money market fund.

Money market funds (MMF) are a pool of people who come together to invest money. This is called a mutual fund or unit fund. A fund manager is a professional who decides on what to invest the money on to increase it.

Money market fun

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ds are required by the government to invest in only low-risk investment vehicles. That means they can only invest in government securities and not risky investments like equity.

Due to their low risk, the MMF it’s hard to lose your money with an MMF, it is the best place to keep your emergency fund. However, we have to choose the investment firms that take too long to pay off your funds when you need them or are not convenient and easy to operate with.

5 things to consider while choosing the Money Market Fund firm

  • Regulated: The money market fund firm and the product you are purchasing should be regulated by the capital market authority. This ensures that they are doing business as per the regulations provided. You can check on this with CMA. You can get check if the company and product licensed on the CMA website 
  • Ease of registrations and operating the fund is important. The investment firm should have a secure portal or mobile app that is easy to register, top-up, and withdraw funds. With our busy lives, we need convenience. The days of filling out 5-page forms and printing passport photos and all sorts of documents and photos are long gone. This makes it easy for you to deposit any extra funds you may have to invest or give instructions fast and safely.
  • Transparency: the investment firm should provide information on the interest rates and any other fees like management fees and commissions that will be charged upfront.
  • Minimum fee. That is how much should you start your MMF with. Some funds like Nabo require a minimum of KES. 100,000 while others require a minimum of as low as KES 1000.
  • Interest rate Most money market interest rates range from 4 to 11% depending on what the fund manager invests in. The interest rates should be published for the public to see.

My advice is to choose an investment firm that offers the best interest rates, is convenient to use, and secure. I will usually choose the firm with interest that is not too high or too conservative in comparison to the treasury bills interest rates.   

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Are you interested in investing in money markets funds that will give you a good interest return and keep your money safe? Get in touch today for a free consultation by clicking on Contact.