How to Invest in Treasury Bills and Bonds in Kenya (2026 Step-by-Step)
Buy government securities directly through the CBK's DhowCSD platform -- minimums, how auctions work, tax, and T-bills vs bonds vs money market funds.
Government securities are among the safest investments in Kenya: you lend money to the government and earn interest backed by the state. Since the Central Bank of Kenya launched the DhowCSD platform, ordinary Kenyans can buy Treasury bills and bonds directly from their phone, without going through a bank. Here is how.
Treasury Bills vs Treasury Bonds
| Feature | Treasury bills | Treasury bonds |
|---|---|---|
| Term | 91, 182 or 364 days | 2 to 30 years |
| How you earn | Bought at a discount; you receive the full face value at maturity | Interest (coupon) paid every six months; capital returned at maturity |
| Auctions | Weekly | Usually monthly |
| Withholding tax | 15% on interest | 15% for most bonds, 10% for bonds of 10 years or more; infrastructure bonds are tax-exempt |
| Best for | Short-term savings | Long-term income |
Step 1: Open a DhowCSD Account
Go to the CBK's DhowCSD portal or download the DhowCSD app. Register with your ID number and KRA PIN, link a bank account (where payments and returns will go), and verify your details. Once approved you can bid in auctions.
Step 2: Choose a Security and Bid
CBK publishes upcoming auctions with a prospectus listing the security, coupon and deadline. You can place a non-competitive bid (you accept the average rate — simplest for individuals) or a competitive bid (you name your rate and risk being rejected if it is too high). The minimum investment is generally KES 50,000 for both bills and bonds; check the current prospectus.
Step 3: Pay and Hold
If your bid is successful you receive a notification and pay by the settlement date, usually through your bank. Your holding appears in DhowCSD. Coupons and redemption proceeds are paid to your linked bank account automatically. You can also roll over T-bills on maturity.
Selling Before Maturity
Treasury bonds can be sold before maturity on the Nairobi Securities Exchange's secondary market through a stockbroker, at the prevailing market price — which may be higher or lower than what you paid. T-bills are usually held to maturity.
T-Bills, Bonds or a Money Market Fund?
If you have less than KES 50,000 or want to withdraw any time, a money market fund is more practical. If you have a lump sum you will not need for months or years, buying directly avoids fund management fees. Many investors use both: an MMF for flexibility and bonds for locked-in long-term income.
Worked Example: A 364-Day Treasury Bill
Suppose you place a non-competitive bid for KES 100,000 face value of a 364-day Treasury bill, and the average rate is set at 10% a year. Because T-bills are sold at a discount, you pay less than KES 100,000 upfront and receive the full KES 100,000 at maturity. The difference is your interest, from which 15% withholding tax is deducted. Use the CBK's published results and the prospectus for the exact price — rates change with every auction.
Understanding Bond Prices and Yields
A bond has a fixed coupon — the interest rate paid on its face value. If market interest rates rise after you buy, new bonds pay more, so your bond's price on the secondary market falls; if rates fall, its price rises. If you hold a bond to maturity, you receive the coupons and the full face value regardless of these price movements. Selling early exposes you to market prices.
Risks to Understand
- Interest rate risk: bond prices move with market rates.
- Liquidity risk: selling bonds before maturity depends on finding a buyer.
- Inflation risk: high inflation reduces the real value of fixed coupons.
- Reinvestment risk: when a bill matures, rates may be lower.
Government securities are considered among the safest local investments because they are backed by the government, but they are not risk-free.
Treasury Bills and Bonds -- FAQ
What is the minimum amount to invest in Treasury bills in Kenya?
Generally KES 50,000 through the CBK's DhowCSD platform. Confirm the minimum in the current auction prospectus.
Are infrastructure bonds tax-free in Kenya?
Yes. Interest on infrastructure bonds is exempt from withholding tax, which is why they are popular with individual investors.
Can I buy Treasury bonds from the diaspora?
Yes. Kenyans abroad can register on DhowCSD with their ID and a Kenyan bank account.
How are Treasury bond coupons paid?
Coupons are paid every six months directly into the bank account linked to your DhowCSD account.
Can I use Treasury bonds as loan security?
Many banks accept government securities as collateral. Check with your bank about lien arrangements.
Where can I see Treasury auction results?
The Central Bank of Kenya publishes auction results, including accepted amounts and average rates, on its website after each auction.
What is the difference between a competitive and non-competitive bid?
A competitive bid names the rate you want and may be rejected if it is too high. A non-competitive bid accepts the average rate set at the auction and is the simpler choice for most individuals.
Final Thoughts
Treasury bills and bonds give Kenyans government-backed returns with no fund fees, and DhowCSD makes buying them as simple as using an app. Start with a non-competitive bid, match the term to when you will need the money, and remember the tax-free status of infrastructure bonds when they are on offer.