KCB Money Market Fund Explained In 2024 (Everything to Know!)

The KCB Money Market Fund has been one of Kenya’s most consistent collective investment schemes in recent memories, averaging an annual return of 10.05%. So, the money market fund is undeniably a top contender for anyone looking for an investment vehicle with an attractive return.

Overall, it’s not just about a decent yield for the KCB Money Market Fund. You also have to factor in its low-risk profile, securities’ short-term maturity, no lock-in period (which translates to withdrawal flexibility), and high liquidity.

However, since KCB money market fund (KCB MMF) is likely to face some competition from other money market funds in Kenya, it may be wise to understand it first to make a better decision. This review will help you do just that.

KCB Money Market Fund

Here’s what we shall talk about:

  • What’s the KCB MMF?
  • What are the characteristics of the KCB MMF?
  • How does the KCB MMF work?
  • Why invest in the KCB MMF?
  • Who should invest in the KCB MMF?
  • How do you join the KCB MMF?
  • How does KCB MMF compare to other money market funds?
  • What are the downsides of the KCB MMF?
  • How do you contact KCB?

Let’s dive in!

In a hurry? Below is a quick fact sheet of the KCB money market fund.

KCB Money Market Fund Kenya Fact Sheet

Fund StructureCollective Investment Scheme
Fund CategoryMoney Market Fund
Fund IdentityKCB Money Market Fund
RegulatorCapital Markets Authority
Fund ManagerKCB Asset Management Ltd
Base CurrencyKenya Shillings
Effective Annual Yield13.6% (as of February 10th 2024)
Minimum InvestmentKsh 5,000
Minimum Top-UpKsh 500
Initial FeeNone
Exit FeeNone
Lock-in PeriodNone
Maturity ProfileLess than 12 months
Underlying SecuritiesT-bonds, T-bills, and bank deposits

What’s the KCB Money Market Fund?

The KCB Money Market Fund, previously the Natbank Money Market Fund (NMMF), is a collective investment scheme by KCB Asset Management Ltd that invests in short-term low-risk securities like treasury bonds, treasury bills, and bank deposits.

As a money market fund, the KCB MMF allows investors to pool funds together, which the fund manager (KCB Asset Management Ltd) uses to invest in the securities. The fund offers investors a stable, safer investment vehicle that guarantees competitive returns.

Overall, KCB MMF is one of the few investment vehicles that comfortably balances financial security with competitive returns, making it a worthwhile pursuit.

how to join KCB money market fund

What are the Characteristics of the Fund?

As a money market fund, the KCB MMF has the following characteristics:

  • Competitive returns – The KCB Money Market Fund Interest Rate is better than what most local banks and SACCOs offer on savings accounts. Recent reports show that the KCB MMF averages at least 10% a year in return, which you may never get from local banks and SACCOs’ savings.
  • Interest compounding – The investment amount earns income, which also earns interest. That’s how the principle of compounding works, and it’s such an attractive factor for the KCB MMF.
  • Low-risk profile – The fund manager, KCB Asset Management, carefully evaluates all prospective investment opportunities to ensure the risk score is low and to capitalize on capital preservation.
  • Short-term maturity – KCB Asset Management only considers investing in financial instruments and securities with a maturity of less than 12 months. Essentially, that improves liquidity while reducing the risk of market fluctuation exposure.
  • No lock-in period – The fund manager lets you cash out your investment whenever possible. There are no time restrictions for doing that.
  • Fast withdrawals – You can withdraw funds from your KCB MMF account on short notice, making attending to urgent and pressing financial calls easy.

How Does the KCB Money Market Fund Work?

The KCB MMF allows members to invest a minimum of Ksh 5,000 and make a minimum top-up of Ksh 500 afterward. The investment amount enables members to hold units or shares, which determines the interest income they earn every month after compounding.

Typically, the fund manager’s (KCB Asset Management) job is to manage the investment portfolio. The fund manager, however, relies on the custodian to keep the funds. Both the fund manager and the custodian are held accountable by the trustee.

KCB Asset Management allows you to withdraw on short notice without lock-in periods. Even better, the interest earned on investment is compounded, improving the overall gain once you become a member.

Why Invest in the KCB Money Market Fund?

KCB MMF is a standout money market fund for several reasons, which should compel you to invest in the fund. They include the following:

  • Attractive returns – The KCB MMF is an attractive investment fund with an average annual return rate of 10.05%. The payouts are much better and more competitive than what you get from most local banks and SACCO savings. Essentially, that’s due to the principle of interest compounding – where interest earned also earns interest.
  • Affordability – Ksh 5000, the minimum deposit amount, is quite reasonable. Most Kenyans can raise that. Even better, no minimum top-up limits or entry or exit fees exist.
  • High liquidity – Since there are no lock-in periods and you can withdraw your funds anytime upon short notice, you can easily access funds and attend to financial emergencies. That makes the fund such an attractive emergency fund option.
  • Convenience – KCB Asset Management lets you access your money market fund account via a mobile app. That makes it easy to top up, withdraw, and examine your money market fund account on the go. All you need is to log into the app.
  • Safety – KCB Asset Management is registered as a fund manager by the Capital Markets Authority (CMA) with registration number 087. That proves they are professionally certified and safe. The fund manager is also particular with the choice of investment instruments, prioritizing low-risk options.

Who Should Join the KCB Money Market Fund?

The KCB MMF is an attractive investment vehicle for different types of investors. It could be that all you want is an investment vehicle with a low-risk profile, short-term maturity, or more competitive yield than what you get from a savings account. If that’s the case, then the KCB MMF is a worthy consideration.

You may also want to consider the KCB MMF if you wish for a savings option that promises capital preservation and high liquidity. That includes setting up an emergency or college fund, raising capital for a small business, or saving up for a major purchase like a car or expensive equipment.

It could also be for a considerable expense such as a wedding or to save up for a Chama or staff welfare. Whatever the case, the KCB MMF will guarantee high liquidity and competitive returns.

KCB money market fund interest rate

How To Join KCB Money Market Fund?

There is no downloadable application form for the KCB money market fund registration on the company website – at least not one we are familiar with. The fund manager mentions that you can send an email using the email address wealthmanagement@kcbgroup.com, and then the fund manager will get back to you.

How Does the KCB Money Market Fund Compare to Others?

Let’s compare KCB MMF to other funds regarding the effective annual yield.

2023 Performance

According to a 2023 Cytonn Report, the KCB MMF had an effective annual yield rate of 11.5% as of September 29th, 2023. That saw it rank 18 out of 24. According to the report, the Gen Africa Money Market Fund was the highest-yielding fund, with an effective annual yield of 14.2%.

Other money market funds making up the top five were Enwealth (13.9%), Cytonn (13.8%), Lofty-Corban (13.2%), and Etica (13.0%) money market funds.

Here’s a table comparing KCB MMF with the top 5 money market funds in terms of effective annual yield rate as of September 29th, 2023:

Rank (out of 24)Money Market FundEffective Annual Yield
1Gen Africa Money Market Fund14.2%
2Enwealth Money Market Fund13.9%
3Cytonn Money Market Fund13.8%
4Lofty-Corban Money Market Fund13.2%
5Etica Money Market Fund13.0%
18KCB Money Market Fund11.5%

2024 Performance

According to a 2024 Cytonn Report, the KCB MMF had an effective annual yield rate of 13.6% as of February 16th, 2024. Even though the fund remained at position 18, there was a 2.1% improvement from the previous report, and that’s an impressive margin after an interval of about five months.

The report also saw a shakeup at the top, where the Etica Money Market Fund was the highest-yielding money market fund at 17.1%, and second and third were Lofty-Corban (17.0%) and Cytonn (16.7%) money market funds.

The other two, making up the top 5, were Gen Africa and Apollo money market funds, with an effective yield rate of 16.0% and 15.8%, respectively.

Here’s a breakdown of the performance of KCB MMF as compared to the top 5 as of February 16th, 2024:

Rank (out of 25)Money Market FundEffective Annual Yield
1Etica Money Market Fund17.1%
2Lofty-Corban Money Market Fund17.0%
3Cytonn Money Market Fund16.7%
4Gen Africa Money Market Fund16.0%
5Apollo Money Market Fund15.8%
18KCB Money Market Fund13.6%
KCB money market fund Kenya

What are the Downsides?

All money market funds in the country have one major challenge or risk – and that’s the challenge of unpredictability. You can’t predict the yield rate, and any previous or current returns do not necessarily reflect future returns.

So, even though the current KCB MMF interest rate is quite decent, you just can’t be sure about tomorrow. It’s a risk you must be willing to take, and it doesn’t just apply to the KCB MMF but every other money market fund. 

How Do You Contact KCB?

Generally, you can contact KCB for inquiries about the money market fund by sending an email using the address wealthmanagement@kcbgroup.com. You can also go to the website under the ‘Contact Us’ section at the bottom right side of the homepage to submit your inquiry. You must leave your name, email, mobile number, and message.

Concluding Thought:

Backed by a reputable financier and a professionally competent money manager, the KCB Money Market Fund is irrefutably one of the best collective investment schemes in the country. With it comes decent return, capital preservation, and high liquidity.

Visit our online shop to find more investment opportunities and ideas, as well as information on better personal finance practices and debt repayment. We’ve just what you need to take the next ‘big’ financial step.

Written by Alex

Written by Alex

I have passion in helping people Make, Manage, Multiply & Protect Wealth.Download my Free Guide to Financial Freedom >>[ GET IT HERE]<<