The Cytonn money market fund (MMF) has been one of Kenya’s best-performing money market funds in recent years. One report, for example, ranks the Cytonn MMF number one in yield and growth rate.
Understandably, that’s because investors have been earning an average of 11% annually, which is pretty decent. So, while the Cytonn MMF only launched in 2017, its performance in the Kenyan money market fund sector has been impressive.
Some investors use the MMF as a savings vehicle for their short-term plans, yet some see it as a low-risk investment option. Overall, there’s much to learn about Cytonn’s money market fund, and I’ll share everything.
Here are the things I’ll cover in this post:
- What is the Cytonn money market fund?
- How does the Cytonn MMF work?
- Is the Cytonn MMF worth it?
- How do I join the money market fund?
- How do I deposit funds into Cytonn MMF?
- How do I withdraw from Cytonn MMF?
Let’s jump into it!
In a hurry? Check out the Cytonn MMF fact sheet below:
Cytonn Money Market Fund Fact Sheet
|Minimum Investment||Ksh 1,000|
|Minimum Top-Up||Ksh 100|
|Effective Annual Rate||11%|
|Annual Management Fee||1.5%|
|Max Investment/Withdrawal||Ksh 300,000|
|Fund Manager||Cytonn Asset Managers Ltd|
|Trustee||Goal advisory services|
|Custodian||Kenya Commercial Bank|
|Signup Route||*809#, Cytonn App or clients.cytonn.com|
What Is Cytonn Money Market Fund?
Generally, a money market fund (MMF) is a Collective Investment Scheme (CIS) that invests money that investors (known as unit holders) pool in low-risk, interest-bearing instruments like treasury bonds, commercial papers, bank deposits, and treasury bills.
Cytonn MMF does that, and as an investor or unit holder, you receive allocated units (more like shares) depending on your investment value.
Cytonn MMF is best for low-risk appetite investors, the conservative type inclining more toward capital preservation and stability.
How Does Cytonn Money Market Fund Work?
The Cytonn MMF ecosystem features four key parties critical to its operation. They are:
- Fund Manager – Sometimes known as the money manager, the fund manager is a CMA (capital markets authority) approved company that develops the investment portfolio on behalf of its investors (or unit holders) and invests the funds.
- Custodian – Usually a bank, the custodian holds the unit holder’s investment, awaiting the fund manager’s decision. So, the custodian releases the pooled funds to the fund manager. And like the fund manager, the custodian has to be CMA-approved.
- Trustee – The trustee is the CMA-approved whistleblower. The company reports any financial malpractice and helps the fund manager and custodian be accountable.
- Auditor – Lastly, the auditor reviews the MMF’s financial records to enable the investors to assess the fund’s performance. Now, with the Cytonn MMF ecosystem in mind, it’s worth noting that the other key players are the unit holders or investors.
Once the investors pool money, they leave it up to the fund manager to invest it in the safest short-term securities. The investments attract an annual interest of about 11%, according to Cytonn.
The interests are, however, compounded daily. Like other money market funds in Kenya, the Cytonn MMF attracts a 15% withholding tax (charged on interest earned) withholding tax.
Cytonn allows you to make a minimum deposit of Ksh 1,000 as your initial investment, and after that, you can top up anything from Ksh 100. Your investment attracts an annual management fee of 1.5%, but there’s no entry (apart from the initial deposit) or exit fee.
Is The Cytonn MMF Worth It?
You already know that the Cytonn MMF, like every other MMF, incurs a 15% withholding task, and you’ve to pay a small fee for the annual maintenance.
So, you may wonder, is this money market fund worth it? Well, the answer is Yes. Cytonn MMF is worth it, and here are the reasons why:
- Good returns — According to Cytonn, the average effective annual rate for its MMF is 11%. The yield rate is impressive compared to some of the best money market funds.
- Liquidity (fund accessibility) – Cytonn allows you to withdraw up to Ksh 300,000 in minutes (3 or so) via MPESA or bank. However, withdrawals above Ksh 300,000 take 2 – 4 days and are only possible via the bank, which is quite okay.
- Safety – The Cytonn MMF is low risk. CMA (Capitals Markets Authority) regulates the money market fund to ensure compliance with MMF guidelines. Moreover, the fund manager is experienced in picking the safest investments.
- Professional oversight – The presence of a fund manager means professional management of the funds. Besides the fund manager, the other ecosystem members (trustee, custodian, and auditor) also have oversight authority.
- Low investment and top-up limits – You only need a minimum of Ksh 1,000 to invest in the Cytonn MMF. After that, you can top up anything from Ksh 100.
- Daily interest compounding – Cytonn MMF interest is earned daily to allow you to withdraw the funds anytime.
- No exit/entry fee – Apart from the initial deposit (Ksh 1,000), there is no other joining fee. Likewise, there is no exit fee, which allows you to withdraw at any time.
- Saving culture – The Cytonn MMF makes saving up for any financial goal easy, knowing that your investment earns interest and you can withdraw at any time. For example, you can set up the account as your emergency fund or save up for family welfare, mortgage or land deposit, car deposit, vacation, or even wedding.
How to Join Cytonn Money Market Fund?
Essentially, Cytonn offers you three signup routes for its money market fund, and they are as follows:
Option 1 – Via the Web Platform
Here’s how to open a Cytonn money market fund via the web platform:
- Visit clients.cytonn.com/apply/investment to access the application form
- Choose the type of application form you want (individual, joint, or corporate) from the first drop-down menu
- Fill out the application form and then wait for a token SMS on your phone
- Enter the token and go ahead to make the initial deposit (Ksh 1,000)
- Apply and wait for a confirmation SMS (to indicate a successful registration) and activation link (via email)
Option 2 – Via the Cytonn Money Market Fund App
The Cytonn mobile app, available on the App store and Google Play, allows you to also sign up for an MMF investor account. Here’s how to sign up via the Cytonn app:
- Download and install the Cytonn app
- Launch the app and enter the amount you wish to invest
- Accept the MMFs terms and conditions
- Complete the application form and wait for a token SMS
- Enter the token received on your phone and pay the initial deposit
Option 3 – Via the Cytonn Money Market Fund USSD
The USSD option is an alternative to the Cytonn mobile app. Here’s how to sign up for the Cytonn MMF via USSD:
- Dial *809# on your mobile
- Choose Create Account
- Enter personal details (name, ID, email), source of funds, and referral code (optional)
- Choose (MMF) Cytonn MMF and enter the investment amount
- Select your preferred payment method
- Confirm the signup details and wait for confirmation details
How to Deposit Money to Cytonn Money Market Fund?
Currently, Cytonn offers the following routes of depositing funds to the money market funds:
Cytonn Money Market Fund Paybill
- MPESA pay bill 552800 (Account number – 0012400721001) or
- MPESA pay bill 775093 (Account number – Client code)
- TD Bank (account name – Cytonn Investments Management LLP, account number – 430565849 and Routing number – 031201360)
- SBM Kenya Ltd (Account name – Cytonn Money Market Fund Collection, account number – 0012400721001)
How to Withdraw Money from Cytonn Money Market Fund?
Cytonn allows you to withdraw money from its money market fund using any of these three ways:
Option 1 – Withdrawal Via the Web Platform
Here’s how to withdraw funds via the Cytonn web platform:
- Visit clients.cytonn.com and log into your account
- Click view fund and then sell units
- Choose the product you wish to withdraw the funds from
- Choose the account you want to transfer the funds to
- Indicate the number of MMF units you wish to withdraw
- Confirm the details and wait for a token SMS
- Enter the token information and wait for the funds to be processed
Option 2 –Withdrawal Via App
If you have access to the Cytonn mobile app, use it to withdraw your earnings as follows:
- Log into the app and click on MMF investments and then sell units
- Indicate the number of units you wish to sell or withdraw
- Choose the bank or MPESA number to receive the funds
- Confirm the details and enter the token you’ll receive via SMS or email
Option 3 – Withdrawal Via USSD
Now, here’s how to withdraw funds from Cytonn MMF using USSD:
- Dial *809#
- Input your PIN
- Choose ‘Transact,’ then ‘Withdraw.’
- Choose to withdraw from Cytonn (MMF)
- Select how you want to receive the funds (bank or MPESA)
- Pick the account to receive the funds
- Enter the amount and confirm the details
Cytonn Money Market Fund Contacts
- Head office – The Chancery, Valley Road Nairobi, 6th floor
- Phone – 0709 107 200
- WhatsApp – +254 748 070 000
- Email – Sales@cytonn.com/ Clientsservices@cytonn.com
- Box number – 20695 – 00200, Nairobi
People Also Ask
1. Is Cytonn Money Market Fund Safe?
The Cytonn money market fund is regulated by the Capitals Market Authority (CMA)of Kenya, and the body ensures they comply with all laid out money market guidelines.
Furthermore, Cytonn enjoys a competent fund manager with experience in money market funds, and a CMA-approved auditor audits its financial documents. So, yes, the Cytonn money market fund is safe.
2. Is Cytonn Money Market Fund Regulated?
Yes, the Cytonn money market fund is regulated by Kenya’s Capitals Market Authority (CMA). That means the fund is low-risk and legit.
3. What Are the Drawbacks of Money Market Funds?
The biggest concern with money market funds is the unpredictable yield rate. You cannot tell the future from the present regarding the interest rate. The rate keeps fluctuating. The other issue is the fund’s purchasing power loss, which is likely to be the case following inflation.
Above is everything to know about the Cytonn money market fund. The money market fund is a fantastic investment opportunity for those who want to protect their investment against inflation and other losses and those looking to save for the short term.