Money Market Rates Have Dropped — Should You Still Invest? Otachi Explains
Money Market Rates Have Dropped — Should You Still Invest? Otachi Explains
If you’ve been following local finance updates, you’ve probably heard that money market fund returns have fallen sharply compared to last year.
So naturally, people are asking: is it still worth putting your money there, or should you explore other options?
To clear the air, we sat down with Otachi, who breaks down why rates have dipped, what money market funds are really meant for, and how to make the most out of them, even in a low-rate season.
Prefer watching?
👉 Catch the full video here
👉 Download the MESH app Google Playstore. Ni 2MB!
What’s Causing the Drop in Money Market Returns??
According to Otachi, return rates of MMFs are expected to rise and fall.
“The rate of money market fund huwa haziko fixed, leo ziko juu kesho zina drop kiasi but that’s just how an investment should behave like, and this also ina apply to all the other investments options.
What you need to remember is that Money markets huwa zina reflect zile results za places where the money is invested” he says.
Hii ni juu money market funds ukuwa ziko invested kwa instruments kama treasury bills,treasury bonds, na fixed deposits.
Halafu hizi underlying rates ziki fall, unapata MMF returns pia zina follow suit. Zikipanda, your interest pia inapanda.
In short, money market funds ina mirror vile economy inaradisha. Ile time financial environment ina cool down, your returns ina reflect that.
Are Money Market Funds Still Worth It?
Yes, but ukiwa na the right mindset.
Otachi anakumbusha investors kuwa money market funds hazikuwa designed kuku’make rich overnight. Their purpose ukuwa different:
“Money market fund sio money makers, but ni ya ku-save some of your money towards raising capital savings for unseen emergencies ama savings for short term goals”
So even if rates zime-drop from 12% to a rate like 7%, MMFs ina-remain kuwa one of the most stable ways za ku-keep doh zako earning something while still being accessible ile time unazi need.
If you put in a big amount to a fixed deposit, you might be able to get to 7% interest, but you can't access your money during that time without losing your interest.
MMFs or Fixed Savings Accounts?
Kama unawaza ku-shift to a savings account instead, Otachi ana-suggest uchape pause and think again.
“Ku-save kwa savings account for example you will not be able to access your money before ile time yenye mli-agree and if you try and do unapoteza the interest yenye ume-earn to that particular point.” He explains.
A money market fund, on the other hand, inakupea freedom:
● You earn interest daily
● You can withdraw anytime without losing your accrued interest
● And you still preserve your capital
That flexibility makes MMFs kuwa a smarter option kwa kila msee anadai both returns na access. Lastly Otachi anadaisha:
“One last thing, unapo invest na ku-save kumbuka, ku-invest wisely huwa hakunanga get rich quick in the world of interments”
Curious kuradisha vile money market funds (MMFs) ziu-work and whether they could be a good fit for you?
👉 Money Market Funds 101: Everything You Need to Know About Safaricom Ziidi
