For many Kenyans, the idea of investing still feels distant. Complicated. Risky. And yet, the safest investment you can make is often ignored: Treasury bonds and bills issued by the government.
They’re backed by the State. They offer guaranteed returns. And you don’t need to be a millionaire to start.
In this guide, we’ll break it all down simply, honestly, and step by step
What is the difference between Treasury Bonds & Treasury Bills?
Think of them as a loan you give the government and in return, they pay you interest.
- •Treasury Bonds are long-term (1 to 30 years). They pay you interest every six months.
- •Treasury Bills are short-term (3 months, 6 months, or 1 year). Instead of interest, they’re sold at a discount, and you’re paid the full amount at the end.
Both are issued by the Central Bank of Kenya (CBK) on behalf of the National Treasury.
Step-by-Step: How to Start Investing
Step 1: Open a CDS Account (Your Investment Wallet)
To buy any bond or bill, you need a Central Depository System (CDS) account this is how the CBK keeps track of your investments.
Here’s what you need:
- •A Kenyan bank account (any commercial bank works)
- •A filled Mandate Card (get one at CBK or download from their website)
- •A passport photo, certified by your bank
- •A copy of your ID or passport
- •Two bank signatories to verify your information
You can submit this physically at a CBK branch or, if you’re abroad, email it with scanned copies (CBK accepts remote applications for the diaspora).
You only do this once. After that, you’re in the system.
Step 2: Watch for New Investment Opportunities
CBK announces new bonds and bills regularly bonds monthly, bills weekly. You’ll find updates:
- •On the CBK website
- •In the Daily Nation or Business Daily
- •Through your bank or investment advisor
Each announcement includes:
- •The issue number (like IFB1/2025/14)
- •The tenor (how long the investment will last)
- •The coupon rate (for bonds this is your interest rate)
- •The minimum investment (KES 50,000 for bonds, KES 100,000 for bills)
This is where you choose what fits your goals.
Step 3: Fill Out the Application Form
When you find a bond or bill you want, you fill in a short form.
You’ll need:
- •Your CDS number
- •Your personal and bank details
- •How much you want to invest
- •The rate you’re bidding (choose average rate if you’re unsure)
- •Whether you want to roll over your investment later
Submit it by 2PM on the Tuesday before the auction closes.
Step 4: Wait for Auction Results Then Pay
After the auction, CBK evaluates bids and sends out results. If your bid is successful:
- •You’ll receive a notification with payment instructions
- •Payment is due by 2PM the following Monday
How to pay:
- •KES < 1 million: cash or banker’s cheque
- •KES ≥ 1 million: use RTGS (Real-Time Gross Settlement) through your bank
Miss the deadline? You may be banned from future auctions so set reminders.
Step 5: Sit Back and Watch Your Money Work
- •If you invested in a bond, you’ll receive interest every 6 months directly to your bank account.
- •If you chose a bill, you’ll get a lump sum at maturity.
CBK will also send you a statement showing your holdings.
And when the bond matures? You can cash out or reinvest (called “rollover”) with a simple form.
Why Should You Invest in Government Securities?
| Reason | Why It Matters |
|---|---|
| Safety | It’s backed by the government no crypto crashes or Ponzi schemes here |
| Guaranteed Returns | You know how much you’ll earn, and when |
| Accessible | Minimum KES 50K or 100K — no millions required |
| Passive Income | Bonds pay you every 6 months. No effort needed |
| Tax Benefits | Infrastructure bonds = tax-free earnings |
(FAQs) About Treasury Bonds in Kenya
How much do I need to start investing?
You need a minimum of KES 50,000 to invest in a Treasury Bond. You can add more in increments of KES 50,000.
What is a Treasury Bond?
A Treasury Bond is a medium to long-term investment where you lend money to the Kenyan government through the Central Bank. In return, you earn fixed interest every six months, and you receive your initial investment back at the end of the bond’s term.
How much do I need to start investing?
You need a minimum of KES 50,000 to invest in a Treasury Bond. You can add more in increments of KES 50,000.
Is investing in Treasury Bonds safe?
Yes. Treasury Bonds are among the safest investments in Kenya because they are backed by the government and managed by the Central Bank of Kenya (CBK).
Are Treasury Bonds taxed?
Yes. The withholding tax depends on the bond’s duration:
- •Below 10 years → 15% tax
- •10 years or more → 10% tax
- •Infrastructure Bonds (IFBs) → Tax-free
Can I invest as a group or chama?
Yes. Chamas, SACCOs, and companies can open a corporate CDS account with CBK and invest collectively.
