Before investing, most people look for the same things: safety, growth, risk level, and simplicity. But with so many options, it’s easy to get stuck deciding where to begin.  

Two of the most popular choices are: Money Market Funds (MMFs) and Treasury Bills (T-Bills). On the surface, they both seem like safe bets, as they are known for being low-risk and ideal for anyone who wants to preserve their capital and earn steady returns without stress. However, they operate in very different ways—and depending on your goals, one might suit you better than the other. 

In this article, we break down how each one works, how accessible they are, who they’re best for, and why investing through Zedcrest Wealth gives you more control, flexibility, and better ways to earn. Let’s dive right into it. 

What Are Money Market Funds? 

Money market funds are mutual funds that focus exclusively on short-term, high-quality debt securities. Popular money market funds in Nigeria are regulated by the Securities and Exchange Commission. 

Like all mutual funds, money market funds pool money from multiple investors, but they have strict limitations on what they can purchase. They invest in securities like commercial papers, certificates of deposit, treasury bills, etc., and all instruments that typically mature within a year and carry minimal default risk. Its primary goal is to preserve your capital while delivering modest, predictable income.  

What makes money market funds particularly appealing is their stability. Unlike other investments that can fluctuate wildly, money market funds work hard to maintain a stable net asset value, usually pegged at ₦1 (for naira money markets) or $1 (for dollar assets) per share. This means that when you invest ₦1,000, you can reasonably expect to get your ₦1,000 back, plus some interest.  

Who is it for? 

• Emergency savers who need cash ready for unexpected expenses. 
• Risk-averse investors who prefer capital preservation over chasing high returns. 
• People who are saving for short-term goals like rent, school fees, etc. 
• People who prefer professional fund managers to make investment decisions on their behalf. 

Advantages of Money Market Funds 

The following are the advantages of money market funds: 

• MMFs are very low-risk because they invest in high-quality, short-term debt instruments, reducing the chance of loss. 
• As with most mutual funds, your money is spread across multiple assets, lowering exposure to any single one. 
• You can withdraw funds easily, within a day or two, without the penalty fees that often come with other investment products.  
• Interest yields are more stable. 
• Interest earned can be automatically reinvested, thus growing your money steadily over time. 
• Expert fund managers handle all investment decisions for you. 

Disadvantages of Money Market Funds 

• While safer than most investments, MMFs don’t offer the highest yields. 
• Although rare, net asset value (NAV) can drop in extreme market conditions. 
• If inflation is high, your real return might be low or even negative. 
• Earnings may be subject to tax, depending on the applicable regulations. 
• It is designed for stability, not for wealth accumulation. 

 

What Are Treasury Bills (T-Bills)? 

Treasury Bills are short-term, low-risk government debt securities issued by the Central Bank of Nigeria on behalf of the Federal Government. They are considered among the safest investments available because they’re backed by the full faith and credit of the Nigerian government. Think of it as lending money to the government for a little while and getting it back with some interest. 

T-Bills are sold at a discount to their face value and mature at full face value upon maturity. Your return is the difference between what you paid and what you got back. For example, you might buy a ₦100,000 T-Bill for ₦95,000 and receive the full ₦100,000 when it matures, earning ₦5,000 in profit. 

These securities come in various maturities, typically within 91 to 364 days. The longer the maturity, the higher the potential return, but your money is locked up for that entire period.  

Who is it for? 

• Conservative investors who want government-guaranteed safety. 
• Investors with lump sums who can meet minimum investment requirements (usually a minimum of ₦100,000 or more). 
• People with fixed timelines who don’t need access to their money until maturity. 
• Direct investors who prefer owning securities outright. 

Advantages of Treasury Bills 

• Before you invest, you know precisely what you’ll earn at maturity. 
• You own them directly, meaning there are no management fees. 
• You will not be taxed on your interest earned. 
• They are very low risk since they are backed by the government. Thus, the chance of default is near zero. 
• They are considered the best investment option for disposable income and are a good, steady income source. 
• Treasury bills are perfect for the preservation of capital. 
• No transaction fee is required to purchase a T-bill. 
• There are no daily market fluctuations to worry about; just wait until maturity. 

Disadvantages of Treasury Bills 

• Treasury Bills usually require a high minimum investment amount, often starting from ₦100,000 or more. 
• They offer limited liquidity since your money is locked in until the bill matures. 
• Once a T-Bill matures, you’ll need to manually reinvest the funds if you want to continue earning returns. 
• T-Bills do not offer compounding because the interest is paid upfront and not automatically reinvested. 
• You must plan your investments around auction dates, which can be inconvenient.  

Key Differences at a Glance 

Feature	Money Market Fund	Treasury Bills
Minimum Investment	Starts from ₦1,000	Typically, ₦100,000 or more
Compounding	Yes, interest can be automatically reinvested	No, you get a fixed lump sum at maturity
Expected Returns	Earns daily interest, which can be high, depending on the market	Fixed interest, typically higher than money market funds
Liquidity	Easy access to funds (within 1 – 2 business days)	Funds are locked until maturity
Fee Structure	Management and possible performance fees)	None
Tenor	No fixed term	Fixed within 91 – 364 days
Management	Professionally managed by fund managers	Self-managed (unless using an investment app)

Which One Should You Invest In? 

It depends on your financial goals, timeline, and priorities. A Money Market Fund offers more flexibility if you want access to your money, automatic reinvestment, and daily income. 

On the other hand, if you’re fine with locking your funds and prefer guaranteed returns from the government, Treasury Bills might be a better fit. They’re ideal for people who want to preserve capital and can commit to fixed terms. 

Many smart investors don’t choose just one; they use both types, allocating funds according to their short-term and long-term needs. This approach provides both security and growth potential. 

Use Zedcrest Wealth to Invest in Money Market Funds and Treasury Bills 

At Zedcrest Wealth, we understand that every investor is different, so we offer a range of options tailored to your unique goals and risk profile.  

Here’s what you get when you invest with us:  

• Access to high-performing and secure investment options.
• Competitive interest rates and expertly curated fund choices (The Zedcrest Money Market Fund offers the highest yields in Nigeria).
• A simple, user-friendly platform that lets you track and manage your investments seamlessly.
• Professional insights and guidance when you need it.

Whether you’re just starting or expanding your portfolio, Zedcrest Wealth is built to help you grow and invest confidently. Ready to start investing? Download the Zedcrest Wealth app to get started.