Money Market Fund vs Treasury Bills in Kenya 2026: Returns, Tax and Access Compared

Updated 20 October 2026

Quick answer: In October 2026 the main Kenyan money market funds were quoting yields a little above Treasury bills. Old Mutual’s money market fund showed an effective annual rate of 10.31% on 15 October 2026, while CBK’s latest average rates were 8.75% for the 91-day bill, 8.86% for the 182-day bill and 9.04% for the 364-day bill. Both are taxed at the same 15% withholding rate. A T-bill locks in a known government rate but needs at least KSh 100,000 and ties up your money until maturity. An MMF lets you start small and withdraw in a few working days, but its rate moves daily and is not guaranteed.

This page is information, not financial advice. Rates change weekly for T-bills and daily for MMFs.

In this guide

1. Rates Side by Side
2. Full Comparison
3. What KSh 100,000 Earns: A Worked Example
4. Why MMFs Are Quoting More Than T-Bills
5. When a Money Market Fund Makes More Sense
6. When Treasury Bills Make More Sense
7. How to Buy Each
8. Risks to Keep in Mind
9. Frequently Asked Questions

Rates Side by Side

As at 19 October 2026. T-bill figures are the previous average interest rates CBK shows for the bills on offer at the auction of 22 October 2026. MMF figures are the latest yields the fund managers publish on their own websites, as tracked on our MMF rates today page.

Option	Rate	Type of rate	Date
91-day Treasury bill	8.75%	Average interest rate, previous auction	CBK, auction of 22 Oct 2026 listing
182-day Treasury bill	8.86%	Average interest rate, previous auction	CBK, auction of 22 Oct 2026 listing
364-day Treasury bill	9.0383%	Average interest rate, previous auction	CBK, auction of 22 Oct 2026 listing
Old Mutual Money Market Fund	10.31%	Effective annual rate, daily	15 Oct 2026
Madison Money Market Fund	10.38%	Effective annual yield, net of fees	Read 19 Oct 2026 (the fund’s page shows no date)

Source line: Central Bank of Kenya Treasury bills page; Old Mutual fund prices page; Madison Investment Managers fund page. Other funds publish their own rates, and the full list of CMA-approved funds is on our list of money market funds in Kenya page.

Full Comparison

Feature	Money market fund	Treasury bill
Who issues or runs it	A fund manager licensed by the Capital Markets Authority, inside a CMA-approved unit trust scheme	The Government of Kenya, through the Central Bank of Kenya
Minimum	Set by each fund; much lower than a T-bill for most funds (check each fund’s page)	KSh 100,000 face value
Return	Variable, accrues daily, not guaranteed	Fixed for the term once you buy at auction
Tax	15% withholding tax on interest earned	15% withholding tax on interest, final for residents
Fees	Annual management fee, usually already taken off the quoted yield	No management fee when you buy direct on DhowCSD; a bank or broker may charge if you buy through them
Access to money	Withdraw any time; funds usually pay out within a few working days	Locked until maturity (91, 182 or 364 days); selling early is possible but not simple
Risk	Low, but not zero; holds T-bills, bank deposits and other short-term paper; not covered by deposit insurance	Very low; backed by the Government of Kenya
How to buy	Fund manager’s app, website, M-Pesa paybill or an agent	CBK’s DhowCSD platform, or through a bank or broker

What KSh 100,000 Earns: A Worked Example

Using the rates above and simple interest for each term, before any change in rates:

Option	Term	Gross interest	After 15% withholding tax
91-day T-bill at 8.75%	91 days	About KSh 2,182	About KSh 1,854
182-day T-bill at 8.86%	182 days	About KSh 4,418	About KSh 3,755
364-day T-bill at 9.0383%	364 days	About KSh 9,014	About KSh 7,662
MMF at 10.31% for a full year	365 days	About KSh 10,310	About KSh 8,764

Two cautions. First, T-bills are sold at a discount: you pay less than KSh 100,000 today and receive KSh 100,000 at maturity, so the exact figures differ slightly from this simple-interest estimate. Second, the MMF line assumes the yield stays at 10.31% for a whole year. It will not. MMF yields follow short-term interest rates up and down, so treat the MMF figure as a snapshot.

Why MMFs Are Quoting More Than T-Bills

MMF managers bought some of their holdings when rates were higher, and they also hold fixed deposits and short-term corporate paper that pay more than T-bills. When those older holdings mature, the fund reinvests at whatever rates are available then, so fund yields tend to follow T-bill rates with a delay. The gap you see today can narrow or widen over the coming months.

When a Money Market Fund Makes More Sense

• Your emergency fund. You need the money within days, not months.
• Saving towards a goal in small amounts, such as school fees or a deposit, from KSh 1,000 or less a month.
• You have less than KSh 100,000 and cannot reach the T-bill minimum.
• You want to park money between investments while you wait for a bond auction or a land deal.

When Treasury Bills Make More Sense

• You have KSh 100,000 or more you will not need for three, six or twelve months.
• You want a rate fixed at purchase rather than one that changes daily.
• You want direct government backing instead of exposure to the mix of assets inside a fund.
• You are building a ladder, buying bills that mature in different months so cash comes back regularly.

Many savers use both: an MMF for cash they may need soon and T-bills for money with a known date of use. For longer horizons, compare bonds with our Treasury bond calculator.

How to Buy Each

Treasury bills

1. Open a DhowCSD account with CBK online, using your ID details and a Kenyan bank account for payments and refunds.
2. Check the bills on offer. CBK holds auctions weekly; the bills listed in October 2026 were auctioned on Thursday 22 October and value dated Monday 26 October.
3. Bid on DhowCSD before the cut-off and pay the amount due by the value date.
4. At maturity, the full face value is paid to your bank account, or you can roll it over.

Our step-by-step guide on how to buy Treasury bills covers DhowCSD in detail.

Money market funds

1. Pick a fund approved by the CMA. Our list of money market funds in Kenya page lists all of them with their size.
2. Open an account on the manager’s app or website with your ID and KRA PIN.
3. Deposit by M-Pesa paybill or bank transfer.
4. Track your daily interest in the app and withdraw when you need to.

Risks to Keep in Mind

• MMF yields are not promises. A fund showing 10% today could show less next month.
• Check the fund is CMA-approved before you deposit. Unlicensed “investment clubs” promising fixed high returns are not money market funds.
• T-bill money is locked. Do not put money you may need next month into a 364-day bill.
• Tax is deducted at source in both cases, so the rate you see is before the 15% withholding tax.

If you are building savings alongside a new job, see current openings on JobinKenya.

Frequently Asked Questions

Which pays more, a money market fund or a Treasury bill?

In mid-October 2026 the leading MMFs quoted about 10.3% to 10.4%, above the 8.75% to 9.04% average T-bill rates. That can change quickly, so compare the latest figures before you invest.

Are T-bills safer than money market funds?

Yes. T-bills are a direct obligation of the Government of Kenya. MMFs are low risk but hold a mix of assets and their returns are not guaranteed.

What is the minimum for a Treasury bill in Kenya?

KSh 100,000 face value, bought through CBK’s DhowCSD platform or a bank or broker.

Is tax the same on MMFs and T-bills?

Yes, both carry 15% withholding tax on the interest earned.

Can I withdraw from a T-bill early?

Not easily. You would have to sell it before maturity, which may mean accepting a lower price. Plan to hold it to the end of its term.

How fast can I withdraw from a money market fund?

Most funds pay out within a few working days of your request. Check your fund’s terms for its exact payout time.