Hazina 254

In a world full of risky investment options, government securities stand out as some of the safest and most reliable ways to grow your money. In Kenya, the government regularly issues Treasury Bills (T-Bills) and Treasury Bonds (T-Bonds) to raise funds for public projects — and in return, investors earn interest.

If you’ve ever wondered how they work or how you can invest, here’s your simple guide from Hazina 254 — helping you unlock the hidden treasures in finance and investments.

1. What Are Treasury Bills and Bonds?

Treasury Bills (T-Bills) are short-term government securities with maturities of 91, 182, or 364 days. They don’t pay periodic interest. Instead, you buy them at a discount and get the full face value at maturity.

For example: You may buy a 364-day T-Bill worth KSh 100,000 for KSh 90,000. After one year, you receive the full KSh 100,000 — earning KSh 10,000 in profit.

Treasury Bonds (T-Bonds), on the other hand, are long-term instruments, ranging from 2 years to even 30 years. They pay semi-annual interest (coupons) until maturity, making them ideal for those seeking regular income.

For instance: A 10-year bond with a 14% coupon rate pays you 7% every six months on your invested amount.

Government Bills and Bonds are considered risk-free, since they’re backed by the Government of Kenya. Beyond safety, they offer several advantages:

•  Predictable Returns: Fixed rates mean you know exactly what you’ll earn.
•  Affordable Entry: You can start investing from as low as KSh 50,000 for T-Bills and KSh 100,000 for Bonds.
•  Liquidity: You can sell your securities in the secondary market through the NSE before maturity if you need cash.
• Tax Benefits: Infrastructure bonds are tax-free — you earn interest without deductions.

3. How to Start Investing

Investing in T-Bills and T-Bonds in Kenya is straightforward. Here’s the step-by-step guide:

Step 1: Open a CDS Account

A Central Depository System (CDS) account is where your securities are held electronically.
You can open one:

• Directly with the Central Bank of Kenya (CBK) — free of charge, by filling out the Individual or CorporateCDS account form available on the CBK website, or
• Through your commercial bank or investment advisor.

You’ll need:

• A copy of your ID or passport
• KRA PIN
• Two passport photos
• Bank details (for payments and interest)

Step 2: Decide What to Buy

Check the weekly CBK auction announcements on www.centralbank.go.ke or in newspapers. These show the available Bills and Bonds, their maturity dates, and terms.

Step 3: Place Your Bid

You submit a bidding form indicating:

• The amount you wish to invest
• Your preferred rate (competitive bid) or acceptance of the market rate (non-competitive bid)

Step 4: Make Payment

If your bid is successful, CBK will notify you. You’ll then pay the purchase amount (through your bank) by the settlement date.

Step 5: Earn Your Returns

• For T-Bills, you’ll receive your full face value at maturity.
• For T-Bonds, you’ll receive interest every six months and your principal back when the bond matures.

4. Pro Tips for New Investors

• Start Small: Begin with a 91-day T-Bill to learn how the process works.
•  Diversify: Mix T-Bills and T-Bonds for short- and long-term goals.
• Track Market Rates: Higher yields may come with longer maturities or changing market conditions.
• Use CBK Direct: This platform allows individuals to manage their government securities conveniently online.

5. The Bigger Picture

When you invest in government securities, you’re not just earning a return — you’re funding national development. Roads, schools, hospitals, and infrastructure projects often rely on this capital.

It’s a win-win: you grow your wealth while building your country.

In Summary

Feature	Treasury Bills	Treasury Bonds
Tenor	91, 182, 364 days	2–30 years
Returns	Discounted (no interest)	Semi-annual interest
Risk Level	Very low	Very low
Minimum Investment	KSh 50,000	KSh 100,000
Ideal For	Short-term savers	Long-term investors

Final Word

Government securities remain one of Kenya’s best-kept investment secrets — secure, transparent, and rewarding. As Hazina 254, our mission is to help you unlock these hidden treasures and turn your savings into smart, steady growth.

Ready to begin?
Visit www.centralbank.go.ke/securities and take your first step toward smart investing today.