Top 5 Best Fixed Income Funds in Kenya (2025)

If you're looking for a low-risk investment that offers steady returns, fixed income funds are a smart place to start. These funds invest primarily in government securities, corporate bonds, and interest-earning deposits, making them ideal for conservative investors or those seeking to diversify their portfolio.

In this article, we’ll explore the top 5 fixed income funds in Kenya in 2025, complete with current interest rates, lock-in periods, and withdrawal terms—everything you need to make an informed decision.

Top 5 Fixed Income Funds in Kenya (2025)

• Madison Fixed Income Fund
• NCBA Fixed Income Fund
• Sanlam USD Fixed Income Fund
• Cytonn High Yield Fund
• CIC Fixed Income Fund

1. Madison Fixed Income Fund

Effective Annual Yield: 13%–15%

Minimum Investment: KES 5,000

Top-Up Amount: KES 1,000

Lock-In Period: 3 months, renewable

Withdrawals: Allowed within 1 working day

Interest Distribution: Monthly

Website: Madison Fixed Income Fund

Madison’s Fixed Income Fund is one of the highest-yielding options on the market. It’s designed to offer stability and consistent income while preserving your principal. The fund invests in high-grade government and corporate debt instruments and is ideal for individuals, SACCOs, SMEs, and NGOs looking for regular payouts and short-term flexibility.

2. NCBA Fixed Income Fund

Effective Annual Yield: 9.56% (as of April 2025)

Minimum Investment: KES 1,000

Withdrawals: Daily, no lock-in period

Management Fee: 2% per annum

Website: NCBA Fixed Income Fund

The NCBA Fixed Income Fund is perfect for investors who want daily access to their funds while still earning better returns than a savings account. With a strong reputation and a transparent investment strategy, NCBA focuses on government securities and high-quality corporate bonds. It's suitable for emergency savings or capital you want to preserve while earning regular income.

3. Sanlam USD Fixed Income Fund

Annual Return: 7.8% (as of February 2025)

Currency: USD

Minimum Investment: $2,500

Withdrawals: Allowed with notice

Lock-In Period: 1–3 months, depending on investment tier

Website: Sanlam USD Fixed Income Fund

For dollar-based investors, Sanlam’s USD Fixed Income Fund provides an excellent hedge against Kenya shilling depreciation. It invests in dollar-denominated debt, including Eurobonds and high-quality international instruments. It's ideal for diaspora investors, exporters, or locals who want foreign currency exposure with predictable returns.

4. Cytonn High Yield Fund

Effective Annual Yield: ~13% (variable)

Minimum Investment: KES 1,000

Lock-In Period: 3 months

Withdrawals: Processed within 2–5 working days

Website: Cytonn High Yield Fund

Cytonn’s High Yield Fund combines fixed income returns with slightly higher risk compared to traditional money market funds. The fund invests in alternative fixed income assets like structured products and private sector debt. While the yield is attractive, investors should review Cytonn’s current financial health and fund liquidity before committing.

5. CIC Fixed Income Fund

Effective Annual Yield: 9%–10%

Minimum Investment: KES 5,000

Withdrawals: Within 3 working days

Lock-In Period: None

Website: CIC Fixed Income Fund

CIC is one of the oldest and most trusted fund managers in Kenya. Their fixed income fund provides moderate returns by investing in Treasury bills, corporate bonds, and fixed deposits. It's a good option for conservative investors who prefer brand stability and easy access to their money.

Key Benefits of Fixed Income Funds in Kenya

1. Capital Preservation: Your initial investment is protected from extreme market swings.
2. Regular Income: Most funds offer monthly or quarterly payouts.
3. Liquidity: Easy access to your money, usually within 1–5 working days.
4. Low Entry Barrier: You can start investing with as little as KES 1,000.
5. Professional Management: Experts handle the allocation and risks.

Things to Consider Before You Invest

1. Returns: While high yields are attractive, verify the fund’s historical performance and asset allocation.
2. Liquidity Needs: Some funds have lock-in periods, so ensure they align with your financial goals.
3. Reputation: Choose fund managers regulated by the Capital Markets Authority (CMA).
4. Currency Preference: Consider USD funds if you earn or spend in dollars.
5. Fees: Understand management and admin fees, as they impact net returns.

Conclusion

Fixed income funds are a great way to earn passive income while safeguarding your capital. Whether you’re saving for a short-term goal, looking to diversify your investment portfolio, or seeking a dollar hedge, there's a fund tailored to your needs in Kenya's growing market. Always review fund fact sheets and speak to a certified financial advisor if you're unsure which option suits you best.