How to buy Treasury Bills in Kenya (step by step)

Want to know how to buy treasury bills in Kenya?

If you have just answered yes, then you have come to the right place.

Below is a complete guide on how to buy treasury bills in Kenya and everything else you need to know about investing in treasury bills in Kenya.

But before we get started, here is a summary of what we will look at:

  • What treasury bills are?
  • The difference between treasury bills and treasury bonds
  • How treasury bills work
  • How to buy treasury bills in Kenya
  • How to invest in treasury bills

What are Treasury bills in Kenya?

Well, you have ever heard of the government falling short of funds…

Now, this is where treasury bills come in- treasury bills are short-term securities (those that do not exceed a period of 1 yr.) issued by the government to the public as one way of raising cash for its budget.

Treasury bonds vs Treasury bills in Kenya

A lot of people confuse treasury bills and treasury bonds in Kenya…

Here are the two key differences:

  1. Treasury bonds are long-term security plans (1 to 30 years) while treasury bills are short-term assets (max is 1 year).
  2. Interest accrued on treasury bonds is payable to the investor occasionally (6-month intervals throughout the maturity period of the bond). On the other hand, there is no interest on treasury bills (treasury bills are traded on discount not interest – more on this shortly).

How do Treasury bills work in Kenya?

First, it’s good to note that treasury bills are a risk-free investment (you lend to the government and there is no way the government is going to default).

Now, I had mentioned that they are sold on discount.

But what does that exactly mean?

Well, you see, this simply means that you select the amount you will receive when your bill matures (the bill’s face value) and you pay less than this amount when you’re purchasing it.

The difference is the discount and it is actually your return.

How to buy Treasury bills in Kenya

Fortunately, purchasing treasury bills in Kenya isn’t an ‘elephant’ thing to do.

To begin with, treasury bills are issued weekly and you have the choice of picking 91, 182, or 364 days treasury bills (the days refer to the maturity period).

And anyone can buy treasury bills as long as they have a CDS account (this is just a virtual account that you use to keep track of your investment in govt securities like bills, and bonds)

Now, to open a CDS account in Kenya……

Walk into any CBK branch on Monday-Friday (before 2 PM) with the following documents:

  • Original ID card and its copy.
  • Copy of your KRA PIN certificate.
  • Passport size photos

Tell the CBK guards you want to open a CDS account..

You’ll be given certain paperwork to go with- There are sections to be filled by you, your bank, and people who know you (referees).

Once it has been filled properly, take it back to your nearest CBK offices with everything attached.

It will take anything between 10-14 days for CBK to open your CDS account so just wait.

Once it has been done, CBK will send you an SMS notification.

Now you can go back there and do the following:

  1. Signup for TMD service- this allows you to bid for bonds and access many other CBK services via USSD code *866#.
  2. Sign the paperwork that specifies the stockbrokers you may want to use, if by any chance you’d want to sell your bonds in the secondary market.

Once TMD service is activated, you’ll be receiving SMS notifications of available treasury bills and bonds and the results of the auctions.

Remember you can be bidding on your phone via *866# for bills and bonds.

Side Note: Download this document if you are not sure how to open a CDS account in Kenya (it has all the information)

How to buy Treasury Bills in Kenya (step by step)

So below is exactly how to buy Treasury Bills in Kenya:

Step 1: Check for the treasury bills on offer

Go here to check the treasury bills on offer at the moment.

From the website, you can also learn about the sizes of offer available, dates of auction, periods of sale etc.

You should have decided on the maturity length you desire based on recent interest rates- this should give you a good idea of what you can expect in the upcoming auctions.

Keep in mind that the least face value you can purchase when it comes to Treasury bills in Kenya is Kshs.100,000 (and you invest in multiples (denominations) of Kshs.50,000.

Your initial investment should obviously be less than your desired face value (I already explained the reason for this).

Step 2: Acquiring and completing a Treasury bill application form

Next thing you do is download the treasury bill application form from the CBK website (

You must fill in the form appropriately (you need to enter information such as your names, mobile number, your CDS account number, and more).

Importantly, you are provided two options when selecting a rate – remember this determines the amount you will be paying for the treasury bill and, hence, your eventual return on the bill.

To be clear, you should choose either Interest/Competitive Rate or Non-Competitive/Average Rate.

Here is the difference between these two rates:

If you select Interest/Competitive Rate when biding, you sort of specify the interest rates you’d like to earn.

Subsequently, the Central Bank will decide on what bids it shall accept and sets a cutoff- this means that Investors who submitted an interest rate above that cut-off will not receive bills from the auction.

On the converse, if you select Non-Competitive(Average Rate) you’re guaranteed to get Treasury bills during the auction.

The only downside is that the interest rate will be computed as a weighted average (of the bids accepted from all the investors who submitted Interest/Competitive rates).

Side note: maximum face value you can quote for Non-Competitive (Average Rate) bids is Kshs.20 million.

Step 3: Submit your Treasury bill application form

You should then submit your completed application form to CBKs head office (or one of the branches) by 2p.m. by the next Thursday for 91, 182, or 364 day bills.

Step 4: Waiting for the auction results

After the auction, you need to either call/visit the CBK or its branches (Nairobi, Mombasa, Eldoret, Kisumu, or Meru, Nakuru, Nyeri) to find out if your application was successful and how much you owe for the successful Treasury bills bid.

Step 5: Paying for the bills

You must submit your payment by 2pm (on the Monday following the auction) or by the following Tuesday (If Monday was a public holiday).

In most cases, payment is done using a cheque if it is Kshs. 1 million (or less) and via electronic bank transfer for larger amounts.

A word on treasury bills maturity

At the expiry of the 91, 182, or 364 days, the face value/amount of your bill is remitted into your commercial bank account (the one stated on your CDS account).

Alternatively, you may choose to roll over the investment (reinvesting the matured value) to the next treasury bills auction- in which case, you need to fill an application form instructing CBK to roll over the investment (submit it before the closure of the sale period for the new bill).

Please note that in case of a rollover, CBK won’t remit the maturing proceeds into your bank account – it only remits refund amounts generated due to the new investment.

Side Note: The date of maturity (of your maturing investment) and the specified value date (of the new bill) need to match for the requested rollover to be successful.

How to calculate treasury bills in Kenya

Let’s assume that our bidding price was Ksh 100,000 and a rate of 1.5% carried the day while the maturity period is 182 days (half an year)…

Our discount will be;

100,000(face value) *182/364(half year) * 0.015(rate p.a.) = 750.

Implying that we shall pay the government Ksh 100,000 – Ksh 750 = Ksh 99,250 and in turn, we receive Ksh 100,000 after 182 days.

Don’t forget that withholding tax will be deducted from the interest earned.

Wrapping up

So, that’s  how to buy Treasury Bills in Kenya…..

Of course, treasury bills are worth investing in especially if you don’t need the money in the next few months.

And the best thing is that treasury bills are not as risky as trading in stocks where price volatility can cause you huge losses within a few days.

Plus, it is a much better option to save money than letting it sit idle in your bank account (where it earns almost nothing).

Try it, now that you have learned how to purchase treasury bills in Kenya.



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