Corporates and Institutions
Absa has chosen to close the Absa Money Market Fund on 6 July 2021. As a valued client you were informed in advance and now, we would like to explain what this means for the investments your company holds with us.
Read our closure letter for full details of the closure.
What you need to do
You will need to move your company’s funds before the AMMF is closed. Please contact your banker or our dedicated Cash Solutions team to discuss what the best investment option will be for your needs.
Frequently Asked Questions
We are committed to providing our customers with products that always meet their needs. We recently reviewed the AMMF and discovered that the majority of our clients believed the fund’s capital and returns were guaranteed. However, because the fund is not a bank account (it is a unit trust or collective investment scheme), we cannot guarantee either the funds or capital. We therefore decided to close the fund in order to allow our customers access to guaranteed investment products with similar or better performance.
All AMMF customers were sent a closure letter via email or post.
If you did not receive your letter, this may be because your email or postal address details are incorrect on our files. However, you can request a reprint of the letter from any Absa branch or read the letter here.
Both the Cash Invest Tracker (CIT for retail customers), and Absa Investment Tracker (AIT for business clients) offer similar or better performance than the AMMF.
Your funds will automatically be transferred to a CIT or AIT account after 90 days from the date of the closure letter should you choose not to withdraw or transfer your funds to another account.
The CIT/AIT are guaranteed products (unlike the AMFF) and offer a simple, secure continuation of your investment.
- Customers are not going to be financially prejudiced/disadvantaged for moving into AIT/CIT earlier. There are no monthly admin fees related to AIT/CIT. Normal Transacting fees will apply to depositing at a teller or ATM for example, as they currently apply to all bank accounts.
- A pricing brochure is available should you want to compare fees/charges. These can be accessed on our website here.
- Historical performances show that the interest rates on AIT/CIT have been comparable to Money Market Unit Trusts Funds, therefore a customer would not be at a disadvantage for moving into AIT/CIT.
- AIT/CIT is a bank guaranteed product whilst the Money Market Fund is not. Money Market Funds are unit trusts in nature and capital cannot be guaranteed.
If you have one or more existing Absa Money Market Fund accounts then:
- You will have 90 days from date of the closure letter to choose where you would like your funds to be transferred to.
- Should you not make a decision, your funds will automatically be moved to a CIT/AIT account for you.
Yes, a new Money Market Fund called the Absa Prudential Money Market Fund (APMMF) will be available from 01 April through your financial advisor.
Unlike the AMMF, the APMMF is a unit trust product:
- The Absa Prudential Money Market Fund has an enhanced investment policy but follows a similar strategy, risk profile and returns to the current Money Market Fund.
- Speak to an Absa financial advisor for more information.
- Should you wish to remain with a bank account product, you can easily transfer your funds to CIT/AIT account.
No. The Absa Money Market Fund will be closed permanently.
You can choose to invest in any of our other unit trust products, investment accounts or withdraw your funds to any of your bank accounts.
You will have 90 days from the date of the closure letter to exercise your choice.
If you choose to do nothing then your funds will be transferred into a CIT/AIT account. You will keep your AMMF account number and the transacting functionality of your AMMF account will continue as normal (i.e. use of Absa ATMs/Branches to deposit and withdraw funds etc).
No. Absa is well in excess of all regulatory requirements regarding liquidity. We are also currently the market leader for deposits as reported by the Reserve Bank’s BA900 on February 2021.
Our decision to close the Absa Money Market Fund (AMMF) was based entirely on providing an appropriate solution for our customers based on research.
After conducting research with our customers, we learned that said customers understood the AMMF to be a bank account and not a unit trust. This was due in part, because unlike other funds, the AMMF carried the Absa brand name and, more importantly, was fully integrated into the bank - customers could both withdraw and deposit their funds through branches, online, at ATMs and more - just like a normal bank account – and this led to the perception that the fund was, in fact, a bank account. And, like funds in a bank account, customers believed that their funds were therefore guaranteed.
Based on the above, we then took the decision to close the AMMF in order to give our customers the kind of product they wanted – a guaranteed investment product.
We cannot comment on actions followed by other banks as we are not privy to their decision-making processes.
The closure was initiated by ourselves as part of a regular review of our product offerings.
The decision was formally presented and approved by the relevant regulators, being the Financial Sector Conduct Authority (FSCA) and the Prudential Authority / Reserve Bank (SARB). In considering the closure of the AMMF, several engagements were proactively held with both the South African Reserve Bank (SARB) as well as the FSCA.
Guidance was sought from the regulators by firstly positioning the composition and status of the current AMMF, as well as sharing the research findings.
Our motivation for the closure of the fund, as evidenced by the findings, was based on our belief that this would be in the best interest of our customers.
We have different products for different customer types based on the underlying regulatory (Basel 3) liquidity value.
AIT is designed and priced for corporations while CIT is designed and priced for individuals, reflecting this value. We believe both products are competitively priced.
Besides Fixed Deposits, which are fixed contractual interest rates, Non-Fixed Deposit products are generally linked to Prime Lending rates and are therefore subject to fluctuate depending on:
- Local Market conditions, which can also sometimes be influenced by Global Markets.
- All banks approach pricing decisions by assessing Competitive and Economic environments.
- Pricing determination remains the prerogative of the bank in recognising its customers who choose to safe keep their investments with the bank.
The interest rates are benchmarked against the top cash investment rates in the market with a floor of Prime less 2.85%
Remember, CIT and AIT interest rates are linked to Prime Lending rates and are subject to change from time to time.
The currently quoted interest rates for both CIT and AIT are therefore likely to increase or decrease, depending on market conditions. However, we expect these rates to remain comparable to AMMF interest rates.
Who to contact
Retail and Private Banking Customers AIFA Advisors allocated to the Branches
Retail customers: email firstname.lastname@example.org or contact 0860 111 515
Private Bank customers: email email@example.com or contact 0860 553 553
Wealth Clients Wealth Advisors firstname.lastname@example.org or contact 0860 265 265 Business Banking Clients Investment Advisors
Or contact 0800 227 592
Money Market desk Cash Solutions team
email@example.com or contact 011 895 5521 Other Unit Trust – Retail firstname.lastname@example.org or contact 0860 111 456