Are Fixed Income Funds Better Than Money Market Funds (MMFs) in Kenya? | 2026 Guide
Are Fixed Income Funds Better Than Money Market Funds (MMFs) in Kenya? (2026 Practical Guide)
TL;DR: Money Market Funds (MMFs) offer safety and liquidity, while Fixed Income Funds can earn higher returns over 1–5+ years. Your choice depends on goals, timeline, and risk tolerance.
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Why This Question Matters to Kenyan Investors
Many Kenyans ask:
“If fixed income funds earn more than money market funds, why shouldn’t I move all my money there?”
It’s a real-life question faced when budgeting for school fees, emergencies, or business capital.
In 2026, with inflation and interest rate shifts, picking the wrong option can reduce real returns or create cash-flow problems.
Related reading: Discover how USD Money Market Funds (MMFs) work in Kenya
Money Market Funds (MMFs): Kenyan Reality
Invest in short-term, low-risk instruments like:
- Treasury Bills (CBK)
- Bank deposits
- Commercial paper
MMFs are regulated by CMA Kenya and provide transparent, liquid options for everyday savers.
Why MMFs Work
- Withdrawals in 24–72 hours
- Low risk of capital loss
- Good for emergencies
- Outperform many ordinary savings accounts
Example: Saving KES 5,000/month while handling school fees — MMFs give flexibility unlike bank fixed deposits.
External references:
Stanbic Money Market Fund Fact Sheet
Jubilee Money Market Fund Fact Sheet
Internal link: How long does money stay in a Money Market Fund?
Fixed Income Funds: Medium-term Growth
Invest in:
- Government bonds
- Corporate bonds
- Infrastructure-linked debt
Moderate risk, potentially higher returns than MMFs over 1–5+ years.
Popular Fixed Income Funds in Kenya
- Gulfcap Fixed Income Fund
- Madison Fixed Income Fund
- NCBA Fixed Income Fund
- CIC Fixed Income Fund
- Britam Bond Plus Fund
- Zimele Fixed Income Fund
- Kuza Fixed Income Fund
External reference: CMA Kenya – Collective Investment Schemes
Internal link: Behavioral mistakes Kenyan investors make
MMFs vs Fixed Income Funds
| Feature | Money Market Funds | Fixed Income Funds |
|---|---|---|
| Risk | Very Low | Moderate |
| Liquidity | High | Medium |
| Returns | Stable, modest | Higher over time |
| Value Fluctuation | Minimal | Possible |
| Best For | Short-term cash | Medium-term savings |
Who Should Choose What?
MMFs are better if you:
- Need money soon
- Are building an emergency fund
- Have irregular income
Fixed Income Funds are better if you:
- Don’t need the money for 1–5 years
- Already have emergency savings
- Want higher returns than MMFs
Example: A BOM teacher saving for a car deposit in 3 years → fixed income fund; a boda boda rider → MMF.
Smarter Strategy
- MMFs for short-term security/emergency cash
- Fixed income funds for mid-term growth
External reference: SharpDaily – MMF growth
Final Verdict
Fixed income funds are not automatically better than MMFs — choose based on timeline, goals, and expectations. In Kenya, smart investing is about matching money to purpose.
Related Articles
- Discover how USD MMFs work in Kenya
- How long does money stay in an MMF?
- Who should NOT invest in shares in Kenya
About the Author
Postine Ngeli
Founder & Writer – MoneyMarketHub Kenya
Practical, Kenyan-focused guides on MMFs, fixed income funds, SACCOs, NSE shares, and smart saving strategies.
Disclaimer
This article is for educational purposes only and does not constitute financial advice. Always review official fund fact sheets, CMA guidance, and consider your unique financial situation.
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