Understanding Money Market Funds (MMFs) in Kenya
Money Market Funds (MMFs) are low-risk collective investment schemes regulated by the Capital Markets Authority (CMA). They pool investor funds to purchase high-quality short-term debt instruments, such as T-Bills, commercial papers, and bank deposits, offering daily compounding interest.
Why Choose MMFs for Capital Preservation:
- NCBA, CIC, & Sanlam Yields: Leading MMFs in Kenya offer annual yields ranging from 11% to 15%+, compounding daily and credited monthly.
- High Liquidity: Unlike fixed bank deposits, MMFs allow you to withdraw your money within 48 to 72 hours without capital penalties.
- Withholding Tax: MMF distributions are taxed at source with a 15% withholding tax on the interest earned, meaning your payouts are fully tax-compliant when they land.