1. What is NCBA Money Market Fund?

The NCBA Money Market Fund is a low-risk investment option that provides investors with competitive returns while maintaining high liquidity. It invests in short-term interest-bearing instruments.

2. How Does the Calculator Work?

The calculator uses the compound interest formula:

Where:

• \( FV \) — Future Value (KES)
• \( Principal \) — Initial investment amount (KES)
• \( Rate \) — Annual interest rate (decimal)
• \( Time \) — Investment period in years

Explanation: The formula calculates how an investment grows over time with compound interest, where earnings are reinvested to generate additional earnings.

3. Importance of MMF Calculation

Details: Calculating future value helps investors understand potential returns, compare investment options, and make informed financial decisions.

4. Using the Calculator

Tips: Enter principal amount in KES, annual rate as decimal (e.g., 0.05 for 5%), and investment period in years. All values must be positive.

5. Frequently Asked Questions (FAQ)

Q1: How often is interest compounded in NCBA MMF?
A: Interest is typically compounded daily in money market funds, though this calculator uses annual compounding for simplicity.

Q2: What is the minimum investment in NCBA MMF?
A: The minimum initial investment is typically KES 5,000, with subsequent minimum additions of KES 1,000.

Q3: Are there fees associated with the fund?
A: Yes, there are management fees (usually 1-2% annually) which are already factored into the published rates.

Q4: How liquid is the investment?
A: Money market funds offer high liquidity, with withdrawals typically processed within 1-3 business days.

Q5: Is the principal guaranteed?
A: While MMFs are low-risk, they are not capital-guaranteed. However, they aim to preserve capital while providing returns.