Is a money market fund better than a fixed deposit in Sri Lanka?

It depends on the rates you compare. Money market funds offer daily liquidity and quote a yield after fees, while fixed-deposit interest is taxed 10% at source (AIT). A fund only wins if its net yield beats the FD's after-tax rate. Use the comparison panel above with your actual numbers — the fund's yield is a projection, not a promise.

How is the return on a money market fund calculated?

The fund's net yield is the gross yield minus the annual management fee. That net rate is compounded over your holding period — daily for most Sri Lankan money market funds — using standard compound growth for a lump sum and future-value-of-annuity maths for monthly top-ups. This tool applies exactly that method.

What management fee do Sri Lankan money market funds charge?

Published expense ratios on UTASL fund fact sheets typically fall around 0.5%–1.25% per year for money market and income funds, though it varies by managing company. The fee is charged against fund assets, so it directly reduces the yield you see. Always confirm the exact figure on your fund's current fact sheet.

Are money market funds safe in Sri Lanka?

Money market funds are licensed and regulated by the Securities and Exchange Commission (SEC) under the Unit Trust Code, which requires daily NAV publication and fee disclosure. They mainly hold short-term government securities and bank deposits, so they are low-volatility — but not risk-free or deposit-insured. NAV can still fall, and yields are not guaranteed.

Can I withdraw money from a unit trust anytime?

Most Sri Lankan money market funds offer daily liquidity — you can redeem units on any business day, usually with settlement in one to a few days, and typically with no exit fee. That daily access is their main edge over a fixed deposit, which locks your money for the agreed term or charges a penalty for early withdrawal.

Does this calculator deduct tax on the fund's return?

No. It shows the fund's pre-tax projected return and only applies the 10% AIT to the fixed-deposit side of the comparison, because unit-holder tax on redemption gains is fund-specific and nuanced. Check your fund's tax disclosure for how your gains are treated, then read the fund figure as pre-tax.

Why does the fixed-deposit side subtract 10%?

Since 1 April 2025 banks deduct a 10% Advance Income Tax (AIT) at source on fixed-deposit and savings interest paid to residents. This tool uses that same rate from its FD interest-tax module, so the comparison reflects the interest you actually keep. Residents earning below the personal relief can file a self-declaration to stop the deduction.

When were the fee band and tax rate last verified?

The typical fee band and the 10% AIT reference were last checked against SEC, UTASL, and IRD sources on 2026-07-17. All yields, fees, and the FD rate are your own inputs — the tool never asserts a live market yield.

Sri Lanka · Finance

Sri Lanka Unit Trust & Money Market Fund Calculator

Project what a money market fund or unit trust grows to after its management fee — lump sum, monthly top-ups, or both — then see whether it beats a fixed deposit once the 10% interest tax is taken off the FD. No signup, no ads, sources cited below.

By Induwara Ashinsana— Executive Director, Ryzera TechnologiesUpdated Jul 17, 2026

Project your fundMMF & unit trust

Verified two ways · 2026

Initial investment (Rs)

Lump sum you invest today. Enter 0 for a top-ups-only plan.

Monthly top-up (Rs)

Extra you add every month (a SIP). Enter 0 for lump sum only.

Expected annual yield (% p.a.)

Gross yield the fund advertises, before its fee.

Management fee (% p.a.)

Typical Sri Lankan MMF band: 0.5%–1.25%.

Investment period

= 36 months. Max 50 years.

Compounding

Money market funds accrue daily. Use monthly to reproduce the worked examples by hand.

Quick amounts

Projected maturity value

Rs 654,960

Total invested

Rs 500,000

Net return

Rs 154,960

Effective return after fees

9.42%

Net yield 9% p.a.

Lost to management fee

Rs 19,941

Vs the same fund with no fee

Value with no fee

Rs 674,902

Compare with a fixed deposit

Fixed-deposit rate (% p.a.)

Compounded over the same term, then the 10% AIT is deducted from the interest.

MMF maturity (net of fee)

Rs 654,960

FD maturity (net of AIT)

Rs 622,047

The money market fund projection is Rs 32,913 higher over this term — assuming the 9% net yield holds, which is not guaranteed.

Year-by-year growth

Year	Opening	Top-ups	Growth	Fee	Closing
1	Rs 500,000	Rs 0	Rs 52,312	−Rs 5,231	Rs 547,081
2	Rs 547,081	Rs 0	Rs 57,238	−Rs 5,724	Rs 598,595
3	Rs 598,595	Rs 0	Rs 62,628	−Rs 6,263	Rs 654,960

Not a guaranteed return.Unit trust and money market fund yields are projections, not promises — NAV can fall and past performance does not predict future results. Verify the current yield, fee, and tax treatment on your fund's latest fact sheet before investing.

Sources: SEC Sri Lanka Unit Trust Code (fee disclosure), UTASL fund fact sheets (fee band), and the site's FD interest-tax module for the 10%AIT rate. Full links are in the “Sources & references” section below.

How it works

A unit trust or money market fund (MMF) pools investors' money and buys short-term instruments — treasury bills, commercial paper, and bank deposits. The managing company publishes a daily net asset value (NAV) and charges an annual management fee, both mandated by the Securities and Exchange Commission of Sri Lanka's Unit Trust Code. This calculator turns the fund's advertised yield and fee into a maturity projection using standard, transparent maths.

The first step is the net yield. Fees are charged against fund assets, so the return you actually see is net yield = gross yield − management fee. A fund advertising 10% with a 1% fee returns 9% p.a. to the unit holder.

That net rate is then compounded over your holding period. With m compounding periods per year (365 for daily, 12 for monthly), the per-period rate is i = net yield ÷ m and the number of periods is n. A lump sum P grows to FV = P × (1 + i)ⁿ. Monthly top-ups are treated as an ordinary annuity — each contribution C is added at period end and earns growth from then on: FV = C × [((1 + i)ⁿ − 1) ÷ i]. The two parts are added for the maturity value.

Three extra figures make the fee cost and true growth rate visible. The fee drag is the maturity value computed at the gross yield minus the value at the net yield — the rupees the fee quietly removed. The effective annual return after fees is (1 + i)ᵐ − 1, which is slightly above the simple net yield because of compounding. The year-by-year table is built by a separate period-by-period simulation whose final balance reconciles with the closed-form maturity value to the rupee — the projection is computed two independent ways and both must agree.

The fixed-deposit comparison compounds the same money at your FD rate over the same term, then deducts the 10%Advance Income Tax (AIT) that banks withhold on interest paid to residents since 1 April 2025. That rate is read from this site's FD interest-tax module, not re-typed here, so there is a single source of truth. Every rate in the tool is your own input; the calculator never asserts a live market yield.

Worked examples

Set compounding to Monthly to reproduce these figures by hand.

Lump sum, 3 years

Rs 500,000 · 10% gross · 1% fee · monthly

Net yield: 10% − 1% = 9% p.a. → i = 0.0075, n = 36 months
Maturity: 500,000 × (1.0075)³⁶ = 500,000 × 1.308645 = Rs 654,323
Total invested: Rs 500,000 → Net return: Rs 154,323
Effective annual return: (1.0075)¹² − 1 = 9.38%
Fee drag: at 10% gross it would reach Rs 674,091 → Rs 19,768 lost to the fee

Monthly top-up (SIP), 2 years

Rs 25,000/month · 9% net · monthly · no lump sum

i = 0.0075, n = 24, C = Rs 25,000
Maturity: 25,000 × [((1.0075)²⁴ − 1) ÷ 0.0075] = 25,000 × 26.1885 = Rs 654,712
Total invested: 25,000 × 24 = Rs 600,000
Net return: Rs 54,712 from Rs 600,000 spread over the two years

Fund vs fixed deposit

Rs 500,000 · 3 years · FD at 8% · 10% AIT · monthly

FD gross maturity: 500,000 × (1.006667)³⁶ = Rs 635,119
Interest: Rs 135,119 → AIT at 10% = Rs 13,512
FD maturity after tax: 500,000 + 135,119 × 0.90 = Rs 621,607
MMF projection Rs 654,323 vs FD Rs 621,607
The fund is Rs 32,716 higher over 3 years — if the 9% net yield holds

Edge case — fee equals yield

Rs 500,000 + Rs 10,000/month · 8% gross · 8% fee · 1 year

Net yield: 8% − 8% = 0% → the balance only grows by your top-ups
Maturity: 500,000 + 10,000 × 12 = Rs 620,000
Total invested: Rs 620,000 → Net return: Rs 0
A fee as high as the yield wipes out all growth — a useful reality check

Frequently asked questions

Sources & references

The typical fee band and the 10% AIT reference were last cross-checked against these sources on 2026-07-17. Fund yields and fees change — always confirm the current figures on your fund's latest fact sheet. This tool is a projection aid, not investment advice, and does not name or rank specific funds.

Related tools

LiveFinance

Debenture Return Calculator

Calculate gross and after-tax returns, current yield and approximate YTM on Sri Lankan listed corporate debentures, with a fixed-deposit comparison. Handles par or secondary-market prices, the 10% AIT and the self-declaration exemption.

Open tool

LiveFinance

Sri Lanka FD Calculator

Calculate maturity value, interest earned, and net-of-WHT return on Sri Lankan rupee fixed deposits, with a side-by-side comparison across the major licensed banks.

Open tool

LiveFinance

ETF Calculator

Project your Employees' Trust Fund (ETF) balance at resignation, retirement, or migration using the statutory 3% employer rate and the ETFB's interest. Free, sources cited.

Open tool

Rate this tool

Be the first to rate

Comments & feedback

Spotted a bug or want an improvement? Tell us — our team reviews every comment, and good ideas get built. Comments are public and anonymous.

Found a bug, edge case, or want to suggest an improvement?

Email me at [email protected] — most fixes ship within 24 hours.