3 Easy Ways to Avoid Money Market Fund Depositing Charges
This is how you can save on transaction charges when depositing money into your money market fund accounts. These charges can add up and eat into your returns, so finding ways to minimize them is important. Here are three simple strategies to help you avoid these costs.
1. Use the Same Bank as Your Money Market Fund’s Custodian
One of the easiest ways to avoid inter-bank transfer fees is to use the same bank as your money market fund’s custodian. The custodian is the institution responsible for safeguarding your money, and it’s usually a bank. If you have an account with the same bank, you can make internal transfers, which are typically free.
For example, if your custodian is Equity Bank and you also have an account there, you can transfer money without incurring any charges. This can save you a significant amount, especially if you’re making large transfers.
2. Deposit Cash Over the Counter
Another way to avoid transaction charges is by making over-the-counter deposits directly at the bank. This method allows you to deposit cash without paying transfer fees. However, be aware of any daily deposit limits that might apply.
For instance, some banks may not allow deposits of more than 250,000 in one day. But if you’re depositing smaller amounts, such as 10,000 or 5,000, this can be a convenient and cost-effective method. Simply visit your bank, provide the necessary details, and deposit the money over the counter without incurring any charges.
3. Make Larger, Less Frequent Deposits
To save on transaction fees, try to consolidate your deposits into fewer, larger amounts instead of making many small ones. Each transaction usually incurs a fee, so minimizing the number of transactions can help reduce these costs.
Additionally, aim to keep the deposited money in your money market fund account for a longer period. This approach not only saves on transaction fees but also allows your investment to grow more efficiently. Frequent deposits and withdrawals can erode your returns, so it’s better to plan ahead and make larger, less frequent deposits.
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Bonus Tip:
Plan Withdrawals Efficiently
When it comes to withdrawing your money, planning ahead can save you additional charges. Instead of using mobile platforms like M-Pesa, which often incur fees, opt for bank transfers. Sending money directly to your bank account is usually free, helping you avoid unnecessary withdrawal fees.
In Conclusion
By following these simple strategies, you can minimize transaction charges and maximize your returns on money market fund investments. Use the same bank as your custodian for free transfers, deposit cash over the counter, and make fewer, larger deposits. Additionally, plan your withdrawals efficiently to avoid extra fees.
Remember, every coin saved is a coin earned. Happy investing!
PS: Feel free to share your thoughts or any other tips you might have in the comments below. Let’s help each other save more and get better returns!