A fixed deposit locks a rate for a term. A money market fund does not. After the rate hikes in 2026, both are paying more than a normal savings account. Which one is better depends on the date you need the money, not on which headline rate is 0.2% higher this week.
I am not printing a bank rate table. Those quotes move every week, and a table that was right on Tuesday is a trap on Friday. The test below still works when the quotes change. The money market yields further down are the ones we published on 6 August 2026, when the repo rate was 7.00%. Use them as context, then check today’s yield.
Disclaimer: I am not a financial advisor. This information is for educational purposes only and should not be considered as financial advice. Always do your own research and consider seeking advice from a qualified financial professional before making any investment decisions.
The rate you are comparing against
The South African Reserve Bank hiked the repo rate to 7.00% in May 2026 and held it in July. On 23 September 2026 the Monetary Policy Committee hiked again, by 25 basis points. The repo rate is 7.25%, and prime is 10.75%, effective 25 September 2026. Confirm that on the Reserve Bank’s website before you lock anything. Banks price off these rates. They do not all pass the full hike through on the same day.
Money market fund yields follow short-term rates, with a lag of days to a few weeks. A hike does not reprice a fixed deposit you already opened. That is the entire product difference.
What you actually own
| Fixed deposit | Money market fund | |
|---|---|---|
| What it is | A loan to one bank, for a set term | A unit trust holding short-dated bank paper, Treasury bills, and similar instruments |
| The rate | Fixed on the day you open it | Changes as the portfolio rolls over. Quoted as a yield, not a promise |
| Access | Early withdrawal is penalised, or refused | Usually one to two business days |
| Guarantee | A claim on that bank | No capital guarantee. The unit price is stable in normal markets. It is not insured like a deposit |
| Tax | Interest. The exemption applies | Distributions are mostly interest. The same exemption applies |
A money market fund is not a bank account with a better label. Read the explainer if you want the risks in full. The short version: you can lose a small amount in a severe credit event, and you will not, in ordinary conditions, see the unit price jump around like an equity ETF.
The comparison that matters
Get two numbers on the same day.
- The fixed deposit quote for the exact term you can lock. Ask what happens if you break it, in rand, not in adjectives.
- The latest daily yield on the money market fund you would actually use. Not a yield from April. Not an “indicative” rate in an advert.
Then ask four questions.
Do I know the date?
If the money is a house deposit in 12 months, and you will not touch it, a fixed deposit that beats the money market yield can be the clean choice. You are being paid to give up the option to change your mind. If the date is “sometime next year, unless the car dies”, you do not have a date. A lock-up is how people pay a penalty to get their own money back.
Is the gap big enough to matter?
On R100,000, a 0.30% gap is R300 a year before tax. A 1% gap is R1,000. An early-withdrawal penalty on a broken 12-month deposit is often larger than a year of that gap. Do not take a lock-up for R300.
What happens if rates move?
You have just lived through two hikes in 2026. A fixed deposit opened in April at the old rate did not collect the September hike. A money market fund did, after a short lag. Lock a rate when you think the next move is down, or when you simply want the number to stop changing. Do not lock a rate because a teller said “rates are attractive” in the same month the Reserve Bank is still hiking.
Have I already used the interest exemption?
Local interest is exempt up to R23,800 a year if you are under 65, and R34,500 if you are 65 or older. Bank deposit interest and money market distributions share that exemption. Above it, both are taxed at your marginal rate. A 7% yield and a 7% deposit are still equal after tax. The exemption does not prefer one of them. The workings are in the tax on investments guide.
Where money market yields were in August
These are nominal annual yields as at 6 August 2026, from the money market comparison. The repo rate was 7.00% that week. After the September hike, today’s yields should be a bit higher. The order of the funds is more stable than the level. Check the manager’s site before you invest.
| Fund | Yield on 6 Aug 2026 | TER | Minimum lump sum |
|---|---|---|---|
| Allan Gray Money Market | 7.04% | 0.29% | R20,000 |
| Nedgroup Investments Money Market | about 7.28% (April factsheet) | about 0.55% | R10,000 |
| STANLIB Money Market | 6.98% | about 0.55% | R5,000 |
| Satrix Money Market | 6.86% | low | None via SatrixNOW |
| Coronation Money Market | 6.91% | about 0.50% | R100,000 |
| Ninety One Money Market | 6.78% | about 0.50% | R10,000 |
| Old Mutual Money Market | 6.70% | about 0.50% | R10,000 |
A bank savings account is the wrong benchmark. It usually pays less than either of these, and people leave emergency money there for years out of habit. If a 12-month fixed deposit quote is below the money market yield you can get the same day, with no extra lock-up benefit you need, the deposit is the worse product. Take the screenshot and move on.
Who should pick which
- Emergency fund: money market fund. Access matters more than a locked extra 0.3%. The point of the fund is that the month you need it is the month you did not schedule.
- Known date, 6 to 24 months out, and the deposit quote is clearly higher: fixed deposit. Match the term to the date. A 24-month deposit for money you need in 10 months is a mistake.
- You think the hiking cycle is finished and the next move is a cut: a fixed deposit locks today’s rate. A money market fund will follow the cuts down. This is a view, not a fact. Size it like a view.
- You might need a portion early: split it. Deposit the slice with a date. Leave the rest in the money market fund. There is no prize for putting the whole balance in one product.
Neither of these is an investment for a 20-year goal. Cash at 7% feels good in a hiking cycle. Inflation and a long horizon still belong in a diversified portfolio, not in a notice deposit. Cash is where the money waits. It is not where a retirement is built.