Money market funds are the best known type of mutual funds available for individual investors since they are a low risk investment which makes it a safe investment and they do not require a lot of money to invest.
Money market accounts are a good investment if you can maintain a high minimum balance, limit the withdrawal of funds and understand that you are not protected against inflation. Money market funds are mutual funds that invest in a high quality, short term debt for instance we have debt based securities, high credit ratings etc. It invests in treasury bills, commercial papers, short term debts and repurchase agreements.
Some of the best paying money market funds in Kenya are:
CIC money market funds
This is a fund that invests in highly in highly liquid, near cash interest bearing investment. It’s of a low risk and invests in a diversified near cash holdings, fixed deposits and high yielding interest rates. It’s flexible, secure and has competitive returns I.e interest is calculated daily and credited at the end of every month.
Its interest rates will fluctuate with the market dynamics and negotiates competitively to give its customers the best rates. It offers 9.9% whereby 5% is charged on the fixed income.
Britam money market funds
This is the leading diversified financial services group and an ideal investment option for cash intended to be used to meet the short term goals like saving for school fees, setting up an emergency fund
With Britam you get to earn between 8-10% in interest as you build your savings.
CBA group money market funds
This is mostly important for low risk investors who prefer stability and security at the same time. It invests in fixed deposits, near cash holdings and interest bearing investments. It’s also flexible, secure and has competitive returns. It has a daily yield of 8.01% with an effective annual rate of 8.30%.
Cytonn money market funds
This is an ideal investment for first time investors and it’s highly competitive I.e the rates are based on the current market. It delivers high level current income while at the same time safeguarding their investors capital and liquidity.
It offers an annual interest rate of 11% which is much higher than what most savings accounts will earn you.
Zimele money market funds
This is a savings plan which allows one to save in a flexible and convenient setting. It pools members contributions and invests them in safe high yielding bearing assets like treasury bills and treasury bonds.i it has an effective annual rate of 9.9%.
So basically while looking for the best paying money market funds, consider the past performance of the fund, its minimum investment and the interest rates and how they offer deposit protection. The higher the interest rate the better but one must be careful not to pick a fund that offers higher rates than the market average. If a fund is offering returns that are 3% upwards higher that its peers it may be pursuing an aggressive investment strategy that may put your investment at risk.
