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Best Low-Risk Money Market Funds for Beginners

Written by Noella Lepdung | Oct 12, 2025 11:23:10 PM

Safe Investing Starts Here

Starting your investment journey in Nigeria doesn’t have to be complicated or risky. Money market funds offer a safe entry point for beginners—balancing low risk, high liquidity, and inflation-beating returns.

With Nigeria’s inflation exceeding 30% in 2025, money market funds have delivered average yields above 21% in Q2 2025, making them a far better option than traditional savings accounts.

 

What Are Money Market Funds? 

Money market mutual funds are professionally managed pools of money invested in short-term, low-risk assets like: 

  • Government securities

  • Treasury bills

  • Commercial papers

  • Fixed deposits (under one year)

    Think of them as upgraded savings accounts — your money works harder while staying protected.

Unlike regular savings accounts offering 5-9% interest, money market funds provide significantly higher returns while maintaining low risk. They are regulated by the Securities and Exchange Commission (SEC), making them legitimate and safe investment channels. 

 

Top Performing Low-Risk Money Market Funds in Q2 2025 

According to the latest SEC data for the week ended July 4, 2025, here are the best-performing money market funds for beginners: 

Fund Name 

Q2 2025 Yield 

Assets Under Management 

Key Benefit 

ARM Money Market Fund 

21.97% 

₦221.1 billion 

Strong institutional expertise 

FBN Money Market Fund 

21.54% 

₦525.5 billion 

Large fund with First Bank stability 

Stanbic IBTC Money Market Fund 

20.08% 

₦1.5 trillion 

Nigeria's largest fund with 192,628 unitholders 

United Capital Money Market Fund 

19.98% 

₦139.2 billion 

Competitive returns with flexibility 

Interestingly, fund size doesn't always correlate with top performance. While Stanbic IBTC Money Market Fund remains Nigeria's largest fund, it yielded 20.08% - below the sector's top performers. 

Compare current rates and features across all available options using nairaCompare's money market fund comparison tool. 

 

Why Money Market Funds Are Perfect for Beginners 

  • Low Entry Barrier: Most money market funds require minimum investments between ₦5,000 to ₦50,000, making them accessible to beginners. 

  • Professional Management: Asset management companies handle all investment decisions, so you don't need expertise to participate. 

  • High Liquidity: Easy entry and exit, with some funds offering daily access, unlike fixed deposits.

  • Inflation Protection: With average returns of 21%+ significantly outperforming savings accounts (typically 5-9%), your money maintains purchasing power. 

  • Capital Preservation: Investments in high-quality, short-term instruments minimize risk while maximizing returns. 

 

Market Growth and Outlook 

Nigeria's money market funds sector continues expanding, with total assets under management exceeding ₦2.8 trillion in Q2 2025, commanding a 45.6% market share of the mutual funds industry. The exceptional returns reflect the Central Bank's aggressive interest rate stance, which has pushed money market instrument yields higher. 

Track updated money market yields on nairaCompare. ng to stay ahead of rate movements.

 

How to Start Investing 

Getting started is straightforward: 

Choose Your Platform: Sign up with investment apps like Cowrywise, ARM Investment Managers, or directly through fund management companies. 
 
Complete KYC: Provide your BVN, valid ID, and proof of address for verification. 
 
Select Your Fund: Review multi-year track records, not just current yields, and consider fund manager reputation from established managers like Coronation, ARM, and Meristem. 
 
Make Your First Deposit: Start with as little as ₦5,000 and set up automatic contributions to build wealth steadily. 
 

For comprehensive guidance, read our guide on maximizing wealth with flexible fixed deposits. 

 

Understanding the Risks 

While money market funds are low-risk, they're not zero-risk. Investors should monitor potential policy rate adjustments that could impact future returns. However, SEC oversight and professional management significantly mitigate these risks. 

Learn more about money market fund advantages and disadvantages before investing. 

 

FAQs 

Q: How much do I need to start? Most funds accept ₦5,000 minimum investments, with some requiring up to ₦50,000. 

Q: Are money market funds safe? Yes, they're SEC-regulated and invest in high-quality government securities, making them one of the safest investment options. 

Q: Can I withdraw my money anytime? Most funds offer withdrawal within 24-48 hours, though some may have minimum holding periods of 30 days. 

Q: How are returns paid? Returns are typically distributed quarterly, biannually, or annually through periodic distributions, or you can reinvest for compounding growth. 

 

Conclusion 

Money market funds offer Nigerian beginners an excellent starting point for building wealth with minimal risk. With Q2 2025 returns consistently outperforming inflation and traditional savings accounts, they provide a practical solution for capital preservation and growth. 

Start comparing your options today using nairaCompare's investment comparison tool to find the best money market fund for your financial goals. 

 

 
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