Treasury Bills and Bonds in Kenya: How to Invest Through CBK and What Returns to Expect

What Are Treasury Bills and Treasury Bonds?

When the government needs money — to pay salaries, build roads, or bridge a budget gap — it borrows. One way it does this is by issuing Treasury Bills and Treasury Bonds to the public through the Central Bank of Kenya (CBK). You buy one, you become the lender. At maturity, the government pays you back your principal plus interest.

The difference between a T-bill and a T-bond is time:

• Treasury Bills are short-term — 91 days (about 3 months), 182 days (6 months), or 364 days (1 year).
• Treasury Bonds are long-term — anywhere from 2 years to 30 years.

Both are backed by the full faith and credit of the Kenyan government. In practical terms, that means they are the safest investment you can make in Kenya. The government has never defaulted on its domestic debt obligations.

Treasury Bills: The Short-Term Option

T-bills work slightly differently from most investments. You do not receive interest payments while you hold them — instead, you buy them at a discount to their face value and receive the full face value at maturity.

Here is a simple example: You buy a 91-day T-bill with a face value of KES 100,000. If the rate is 15%, you might pay roughly KES 96,300 today. In 91 days, CBK pays you KES 100,000. The KES 3,700 difference is your return.

Current rates (2025/2026 approximation)

• 91-day T-bill: approximately 14–16% per annum
• 182-day T-bill: approximately 14–16% per annum
• 364-day T-bill: approximately 15–17% per annum

These rates change weekly based on auction demand. CBK publishes the results of every auction on its website. The 364-day bill has historically offered a slight premium because you are locking your money up for longer.

Minimum investment and tax

The minimum investment is KES 50,000 per bid, in multiples of KES 50,000. So you can buy KES 50,000, KES 100,000, KES 150,000, and so on.

The interest you earn is subject to 15% withholding tax for Kenyan residents. CBK deducts this automatically, so the net rate you receive is roughly 85% of the quoted rate. At 15% gross, your net return is about 12.75%. Still very good — and it is automatic, fully compliant, no additional tax forms to file.

Treasury Bonds: The Long-Term Option

Treasury Bonds suit investors who want regular income over a longer period. Unlike T-bills, bonds pay semi-annual coupon interest — every six months, CBK credits interest into your bank account. You hold the bond, collect coupons twice a year, and get your principal back when the bond matures.

The minimum is also KES 50,000. Bonds range from 2-year to 30-year tenors, though CBK typically issues them in common tenors like 2, 5, 10, 15, and 20 years.

Infrastructure Bonds: the one you really want to know about

Infrastructure Bonds (IFBs) are a special category of Treasury Bond issued to fund specific infrastructure projects — roads, hospitals, power infrastructure. They carry one very significant advantage: the interest is completely tax-free.

That zero withholding tax makes a bigger difference than it might look at first. Consider this comparison:

The tax-free bond at 14% actually puts more money in your pocket than the taxed bond at 15%. This is why infrastructure bonds are oversubscribed almost every time CBK issues them — retail investors understand the math and pile in. When you see CBK announce an IFB, pay attention.

Can you sell a bond before maturity?

Yes. Treasury Bonds are traded on the secondary market through the Nairobi Securities Exchange (NSE). If you bought a 10-year bond and need your money back in year 3, you can sell it. The price you get depends on prevailing interest rates at the time — if rates have risen, your bond is worth less; if rates have fallen, your bond is worth more. This is standard bond price behaviour. For most retail investors holding to maturity, this is not a concern.

How to Buy: The DhowCSD Portal

This is the part that surprises most people. You do not need a broker, a financial advisor, or a bank to invest in T-bills and bonds. CBK operates a free online platform called DhowCSD — the Central Securities Depository — where you can register, place bids, and manage your investments directly.

DhowCSD is available at cbk.go.ke/dhowcsd. Registration is free. You need your National ID and an active Kenyan bank account.

Step-by-step: buying your first T-bill or bond

1. Register on DhowCSD. Go to cbk.go.ke/dhowcsd, click "Register", fill in your details, upload a copy of your ID. Approval typically takes 1–3 business days. Once approved, you get a CSD account number.
2. Link your bank account. You will need to link the bank account where CBK will deduct your investment amount and later pay your returns. This is a one-time step.
3. Fund your CSD account. Transfer money from your bank into your CSD account ahead of the auction date. CBK publishes an auction calendar on its website so you know when to have funds ready.
4. Place your bid. Log into DhowCSD, select the security you want (e.g., 91-day T-bill), enter the face value you want to purchase, and choose your bid type.
5. Choose non-competitive if you are new. There are two bid types: competitive (you specify a rate and hope CBK accepts it) and non-competitive (you accept whatever rate the auction settles at). Non-competitive bids are always accepted — there is no risk of being shut out. They are the right choice for most retail investors. The rate you end up with is the weighted average of all accepted competitive bids — which is typically a fair market rate.
6. Wait for the auction result. T-bill auctions happen every week (usually Wednesday). Bond auctions happen monthly. CBK announces results within 24 hours.
7. Collect at maturity. If your bid is accepted, the face value is deducted from your CSD account. At maturity, CBK credits your principal plus net interest (after withholding tax) directly to your linked bank account. You do not need to do anything.

The whole process after registration is done from your phone or laptop. You do not visit any office. You do not speak to anyone. CBK handles the settlement automatically.

Other ways to buy

If you prefer, you can also invest through commercial banks (KCB, Equity, Co-op, NCBA, and others all offer T-bill and bond services) or through investment banks and stockbrokers (AIB-AXYS Africa, SBG Securities, etc.). These intermediaries charge a commission — typically 0.1–0.3% of the investment amount — but they handle the DhowCSD mechanics for you. For a first-time investor who finds the portal intimidating, this is a reasonable option. Once you are comfortable, switch to DhowCSD directly and keep the commission.

How Do T-Bills and Bonds Compare to Other Investments?

The money market fund is the most liquid option — you can put money in today and pull it out tomorrow. For an emergency fund, that is important. But for money you are setting aside for 3 months or longer, a T-bill at 15% gross will almost always beat a money market fund at 12–15% — and it is backed directly by the government rather than a fund manager's portfolio.

Fixed deposits at banks are the one option that truly makes the least sense at current rates. A bank is paying you 7–10% on your savings while itself investing a chunk of those savings in T-bills at 15%. The spread is the bank's profit. By going to CBK directly, you cut out the middleman.

What Are the Risks?

Government bonds in Kenya are widely considered the lowest-risk investment available. The government controls the printing press — it can always pay back KES-denominated debt. That said, there are a few things to be aware of:

• Inflation risk: If inflation runs at 8–10% and your T-bill returns 15% gross (roughly 12.75% net after tax), your real return is around 3–5%. That is still positive, but it is not as impressive as the headline rate suggests.
• Opportunity cost: A 364-day T-bill locks your money for a year. If something else comes along — a better investment, a business opportunity — you cannot access that capital without selling on the secondary market (bonds) or waiting for maturity (T-bills).
• Exchange rate risk: If you are thinking in USD or comparing to international assets, KES depreciation erodes your real returns from a foreign currency perspective. For investors earning and spending in Kenya, this is largely irrelevant.
• Rollover risk: T-bill rates change week to week. If you are rolling over 91-day T-bills hoping to keep earning 15%, and rates drop to 12%, your next reinvestment earns less. Longer-term bonds lock in the rate for the full tenor.

None of these risks compares to the risk of leaving your money in a savings account earning 3–5% while inflation chips away at its value. The biggest financial risk most Kenyans face is not investing at all.

Who Should Be Investing in T-Bills and Bonds?

Anyone who has KES 50,000 they will not need for at least 91 days and wants a safe, predictable return without exposing themselves to the volatility of stocks or real estate.

That covers a wider range of people than most think:

• A salaried employee who has built up emergency savings and wants their excess savings doing more than sitting in a bank account.
• A small business owner who collects school fees in January and does not need the full amount until March — park it in a 91-day T-bill.
• A chama that pools monthly contributions and wants to grow the pot between annual distributions — bonds with semi-annual coupons can work very well here.
• Someone approaching retirement who wants steady, predictable income — infrastructure bond coupons, tax free, every six months.
• Anyone who is putting money into a money market fund and has never wondered what the fund manager is buying with it (often T-bills and T-bonds — you can just buy those directly).

Getting Started: A Practical Timeline

Here is a realistic timeline from zero to first investment:

• Day 1: Visit cbk.go.ke/dhowcsd. Register. You will need scanned copies of your National ID (front and back) and your bank account details.
• Days 2–4: CBK reviews and approves your account. You receive a CSD account number by email or SMS.
• Day 5: Log in, link your bank account, and check the CBK auction calendar. Identify the next T-bill auction date (usually the following Wednesday).
• Before the auction: Transfer your investment amount from your bank to your CSD account. Confirm the funds have arrived.
• Auction day: Log in, place a non-competitive bid for the tenor you want. Submit before the 2:00 PM deadline.
• Day after auction: CBK announces results. If accepted (non-competitive bids always are), your account is debited and your T-bill is credited.
• At maturity: Your principal and net interest land in your bank account automatically.

From registration to your first maturity payout, the entire experience is digital. The heaviest lift is the initial registration and account linking — after that, reinvesting takes about five minutes per auction.

Bottom Line

Treasury Bills and Treasury Bonds are not exotic financial instruments. They are straightforward government loans that pay better than almost any bank product in Kenya, carry the lowest possible credit risk, and are now accessible to anyone with a National ID, a bank account, and KES 50,000.

The infrastructure bond, in particular, is one of the best deals in Kenyan personal finance right now. Tax-free returns of 14–16% per year, backed by the government, paid directly to your bank every six months. If one is available and you have capital to deploy, it deserves serious consideration.

Start with the DhowCSD portal, try a 91-day T-bill to get comfortable with the process, then scale up. Your savings account will not miss the money — but over time, you will.