Money market funds in Kenya: how they work and how to choose one
Money market funds have become the default savings tool for many Kenyans. Here is what the advertised yield really means, how much you keep after tax, and how to choose a fund.
A money market fund (MMF) pools money from many savers and invests it in low-risk, short-term assets such as Treasury bills, bank deposits and short-term bonds. You can usually start with a small amount, add money by M-Pesa or bank transfer, and withdraw within a few working days.
What the advertised yield means
Funds advertise an effective annual yield: what you would earn over a year if today's rate stayed the same, with interest added to your balance as it is earned. Interest accrues daily and is usually credited monthly.
Because the yield already includes compounding, the monthly rate is not the yearly yield divided by 12. It is:
Monthly rate = (1 + yearly yield)1/12 − 1
At a yield of 11.01%, that is about 0.874% a month, so KES 100,000 earns about KES 874 in the first month before tax.
Tax: what you actually keep
Interest from money market funds is subject to 15% withholding tax, deducted before it reaches your account. In the example above you keep about KES 743 of the KES 874.
Over a full year, a fund yielding 11.01% before tax works out to about 9.29% after tax, so KES 100,000 grows to roughly KES 109,291 if you leave it untouched. Our savings growth calculator does this for any amount and monthly top-up.
Current yields
As of 20 October 2026, the highest-yielding shilling funds included Cytonn (11.01%), Faulu (10.80%) and Lofty Corban (10.55%), with most large funds between 8% and 10.5%. See all 27 funds, with after-tax yields and minimum investments, on our money market fund rates page.
Five checks before you invest
- Is it licensed? Only invest with funds approved by the Capital Markets Authority (CMA). Check the CMA's list of licensed collective investment schemes.
- How fast can you withdraw? Most funds pay out within two to three working days. Check before you need the money.
- How do you pay in and take out? M-Pesa paybill, bank transfer or app; look at any withdrawal charges.
- Is the yield before or after fees? Ask whether the quoted yield is after the management fee.
- Size and track record. A fund at the top this week may not stay there. Yields follow Treasury bill rates, so expect them to move.
Is a money market fund safe?
MMFs hold low-risk assets, but they are not bank deposits and are not guaranteed. The value of your savings is very unlikely to fall, but the yield can drop when interest rates in the economy fall.
Sources
This article is general information, not financial advice.