Money Market Funds (MMFs) have become a popular investment choice for many Kenyans looking to grow their savings while keeping their money secure.
An MMF is a unit trust fund managed by a professional fund manager, providing investors with a safe place to keep their cash while earning a return.
Compared to regular bank accounts, MMFs offer higher returns than bank deposits.
They also provide a flexible savings option, ensuring that savings grow at a faster rate.
Money market funds allow investors to access their money within 2 to 4 business days, making them ideal for short-term financial goals such as rent, school fees, or emergencies.
The key advantage of investing in MMFs is their low risk, enabling investors to earn steady returns without exposing their money to the high risks of the stock market.
MMFs invest in secure assets such as government securities and high-quality corporate debt, reducing the likelihood of financial losses.
According to a report seen by Kenyans.co.ke, the highest-yielding Money Market Fund in Kenya at the moment has an interest rate of 16.6%, while the lowest offers 7.0%.
Before investing in MMFs, one should identify their financial objectives—whether saving for a short-term goal or looking for a place to hold cash while waiting for better investment opportunities.
Different MMFs have varying minimum investment thresholds, with some requiring as little as Ksh 500 or Ksh 2,000 to start investing.
Before committing to these funds, investors should ensure they are comfortable with the requirements.
These are the factors to consider when selecting MMFs;
- Personal financial goals
- The fund's historical performance
- The management fees
