Looking for a safe, low-risk way to grow your savings in Kenya—without locking your money for months or years? That’s where Money Market Funds (MMFs) come in. They’re one of the smartest investment tools for beginners and seasoned investors.

In this guide, we’ll explain how money market funds work in Kenya, how to invest, what returns to expect and why it’s gaining popularity across the country.

What Is a Money Market Fund?

A Money Market Fund is a type of unit trust that pools your money together with other investors and the fund manager invests it in low-risk, short-term financial instruments like:

  • Treasury bills

  • Fixed deposits

  • Commercial papers

  • Government bonds

  • Bank certificates of deposit

These investments are safe and stable, that’s why MMFs are one of the least risky ways to earn interest while keeping your cash accessible.

How Does It Work?

Here’s how a money market fund operates in Kenya:

1. You Deposit Money

You sign up with a licensed MMF provider (like CIC, NCBA, Sanlam, Britam, etc.) and deposit funds into your investment account. You can start with as little as KES 100 to KES 1,000, depending on the provider.

2. The Fund Manager Invests It

Your money is pooled with others and invested in safe, short-term securities such as treasury bills, commercial papers and fixed deposits in reputable banks.

3. You Earn Daily Interest

Every day, the fund earns interest based on its investments. That interest is distributed to all investors daily and your investment grows over time.

4. You Can Withdraw Anytime

Unlike other investments, MMFs offer high liquidity. You can withdraw your money within 24 to 72 hours, perfect for short-term savings or emergency funds.

How Much Can You Earn?

Returns vary from fund to fund but in Kenya, MMFs typically offer annual interest rates of between 9% to 12%, depending on the economic environment.

Here’s an example:

  • If you invest KES 100,000 in a fund offering 10% interest annually, you’ll earn around KES 10,000 per year, or KES 833 per month, minus fund fees.> Note: These earnings are usually compounded daily, so your interest earns more interest the longer you leave it untouched.

Top Benefits of Money Market Funds in Kenya

  • ✅ Low Risk: Your money is invested in government securities and high-rated institutions.

  • ✅ High Liquidity: You can access your money in 1–3 working days.

  • ✅ Higher Returns than a regular savings account or fixed deposit.

  • ✅ Capital Preservation: Your original investment is protected.

  • ✅ Low Entry Amount: Start with as little as KES 100 to KES 1,000.

  • ✅ Ideal for Saving Goals: Emergency funds, school fees, rent, side hustle income, etc.

Are There Any Charges?

Yes, but they are minimal:

  • Management Fee: Usually 1%–2% annually, deducted from the interest you earn

  • Withholding Tax: 15% on the interest earned (charged by the government)

These fees are already factored into the net return shown by the fund provider, so the rate you see is what you actually earn.

Who Can Invest?

Anyone can invest in a money market fund in Kenya, including:

  • Employed individuals

  • Freelancers and business owners

  • Students saving pocket money

  • Chamas (investment groups)

  • SACCOs and SMEs

You just need:

  • A national ID or passport

  • KRA PIN

  • Mobile number and email

  • Bank account or mobile money number for withdrawals

How To Start Investing in a Money Market Fund in Kenya

Step-by-Step Guide:

  1. Choose a licensed MMF provider – some popular options include:

    • CIC Money Market Fund

    • Sanlam Money Market Fund

    • NCBA Money Market Fund

    • Britam Money Market Fund

    • Madison, Zimele, ICEA Lion, Old Mutual, etc.

  2. Fill in an application form (online or physical)

  3. Submit your documents:

    • National ID or Passport

    • KRA PIN

    • Recent passport photo (optional)

  4. Deposit funds via M-PESA or bank transfer

  5. Start earning daily interest!

Most providers have USSD codes or apps that allow you to monitor your account, deposit, and request withdrawals.

Things to Keep in Mind

  • Returns may vary slightly depending on market conditions

  • Choose a CMA-licensed provider for safety (check on the Capital Markets Authority website)

  • Don’t treat it like a get-rich-quick scheme — MMFs are for long-term growth

Conclusion

Money Market Funds in Kenya is a easy, safe and profitable way to grow your savings. Whether you’re saving for a rainy day, your child’s education or a future investment, MMFs is a good foundation.

So, if your money is idle in your bank account earning nothing—put it to work in a money market fund and let it grow while you sleep.