Shares vs money market funds vs T-bills
A lump sum in Kenya usually ends up in one of three places: a money market fund, a Treasury bill, or shares on the NSE. They answer different questions. This guide sets them side by side on the things that matter when the money is yours.
The three in one table
| Shares (NSE) | Money market fund | Treasury bill | |
|---|---|---|---|
| What you own | A slice of a company | Units of a fund that lends short term to banks and the government | A loan to the Government of Kenya for 91, 182 or 364 days |
| Return comes from | Dividends and the share price moving | Interest, credited daily | The discount: you pay less than the face value you get back |
| Can it fall? | Yes, and it does most weeks | Very rarely; the unit price is held at KES 1 | No, if held to maturity |
| Minimum | One share since August 2025 (apps may set KES 500 to 1,000) | KES 100 to 5,000 depending on the fund | KES 50,000 |
| Getting money out | Sell during the session; cash on T+3 | Withdrawal in 1 to 3 working days | At maturity, or sell early on the secondary market |
| Tax | 5 % withholding on dividends (15 % for non-residents); no capital gains tax | 15 % withholding on interest | 15 % withholding on interest |
| Where | Broker or app with a CDS account | Fund manager's app, M-PESA | CBK DhowCSD portal or app |
Money market funds
A money market fund (MMF) pools savers' money and lends it short term: fixed deposits with banks, Treasury bills, commercial paper. The fund manager quotes a daily yield, interest accrues daily and the unit price stays at KES 1, so your balance only ever goes up before fees and tax. Yields move with Treasury bill rates, usually a little above or below them.
- Typically used for an emergency fund, money you will need within a year, and the cash you keep aside while deciding what to buy.
- Watch for the management fee (typically 1 to 2 % a year, taken before the quoted yield) and the difference between the gross and net yield in adverts.
- Regulation: funds are licensed by the CMA and must publish their yield daily; the CMA lists the approved ones.
Treasury bills
A Treasury bill is a short loan to the Government of Kenya. You bid at the weekly auction through the Central Bank's DhowCSD platform, pay a discounted amount, and receive the full face value at maturity in 91, 182 or 364 days. The rate is set at each auction and published by the CBK, so you know your return the day you invest.
- Typically used for a fixed sum you can lock away for three months to a year and want to be certain of.
- Watch for the KES 50,000 minimum, the wait for the auction result, and the fact that your money is tied up until maturity unless you sell on the secondary market.
- Bonds: longer government paper (2 to 25 years) pays interest twice a year; infrastructure bonds are tax-free, which is why they are oversubscribed.
Putting them together
Many people hold all three in some proportion: a money market fund for the money that must be there tomorrow, Treasury bills or bonds for the money with a date on it, and shares for the money that can wait. The share of each depends on when you need the money, not on which one has had the strongest month. Tax rates are as at September 2026 (PwC Kenya withholding tax table, reviewed 17 July 2026).
KenyaStocks shows prices and news; it does not give investment advice. If you want a portfolio built for your situation, a CMA-licensed adviser can do that.
Sources
Last reviewed · General information, not investment advice.