Kenya Government Securities

Debt instruments are one of the safest investment vehicles to consider, especially government-issued debt instruments. That’s because government-issued securities are usually backed by the country’s credibility and full faith, as well as its ability to levy taxes to meet the repayment of these liabilities.

The Kenyan National Treasury offers two government securities to invest in; treasury bonds (T-Bonds) or treasury bills (T-Bills). The difference between these two is that T-Bills are short-term investment vehicles of one year or less while T-Bonds are medium to long term, usually 1 to 30 years. 

Here’s a simple guide on how to invest in the Kenyan government securities: 

Related post: Types of investment assets in Kenya 

Investing in Treasury Bills (T-Bill)

The Central Bank of Kenya (CBK) auctions T-Bills weekly, which means there is a consistent opportunity to meet your investment needs. It offers T-Bills with maturity dates of 91, 182, or 364 days. Depending on your investment’s maturity date, you will receive your returns in 3, 6, or 12 months. 

T-Bills have attractive interest rates, ranging from 6% to 8%. 

For example, I checked the CBK site for T-Bills on offers while researching for this article. The site had the 91-Day, 182-Day, and 364-Day T-Bills on offer. The site also shows the previous average interest rates for these offers as 6.861%, 7.333%, and 8.204%, respectively. 

Image at CBK,


One thing to note, though, is that CBK sells the T-Bills at a discount. That means you will pay less the face value (what the T-Bill is worth) but receive the face value at maturity. 

For instance, if I were to invest Kes. 100,000.00 in a 364-Day T-Bill, I will pay less than Kes. 100,00.00 but receive the full amount upon maturity. Using the CBKs calculator, I will pay Kes. 93,571.45 and earn an interest of Kes 6,428.55 to make Kes. 100,000.00 (I have used the average interest rate for the 364-Day T-Bill on the table above).    

Image screenshot from CBK calculation


You can invest in T-Bills directly through the CBK if you have an account with a local commercial bank. Alternatively, you can also invest as a nominee through an investment bank or a commercial bank. 

First, you need to open a CDS account with the CBK. This is a one-time procedure for anyone who doesn’t have an account yet. Second, choose your preferred T-Bill, the 91-Day, 182-Day, or 364-Day option. You can use the recent interest rates to estimate what to expect from the upcoming auctions. It is also essential to consider how long you are okay with lending the money because you cannot access these funds until the maturity date. 

You also get to choose the applicable rate to determine how much you will pay for the T-Bill and your return upon the bill’s maturity. There are two options to choose from, the Non-Competitive/Average Rate and the Interest/Competitive Rate.

The Non-Competitive/Average Rate uses a weighted average rate from the accepted bids. If you choose this rate during your application, you are guaranteed to get a piece of the auctioned T-Bills. However, there is a maximum face value of Kes. 20M. 

On the other hand, the Interest/Competitive Rate option does not guarantee you will receive the T-Bil. This option allows you to indicate our preferred interest rate. The CBK chooses the bids to accept and the cutoff. If you submitted an interest rate above the cutoff, you would not receive a T-Bill from that auction. 

CBK publishes the T-Bills on offer on its website, and you can keep tabs on it here. You will need a minimum investment amount of Kes. 100,000.00 to invest in T-Bills.   

Investing in Treasury Bonds (T-Bonds)

As mentioned, T-Bonds are medium to long term investments, making them ideal for anyone with a long investment time horizon, like retirement. Although the CBK auctions T-Bonds every month, there are other bonds offers throughout the year to consider. 

Related post: 5 key steps to safe retirement planning 

Most bonds have a fixed rate, meaning the rate of return CBK chooses during the auction applies throughout the bond’s life. That means you will receive a regular coupon, which is usually paid semi-annually for most bonds. With this, you will receive the interest return twice a year. 

Investing in T-Bonds also requires one to have a CDS account. You then choose your preferred bond based on what the CBK is auctioning and your investment horizon (time). Some of the bonds available include:

  • Fixed coupon bonds 
  • Zero-coupon bonds – these are issued for a shorter period and at a discount, like T-Bills. The binds do not have a coupon, i.e., you will not receive any interest payments during the bond’s life.
  • Infrastructure bonds – the government uses these to raise funds for particular infrastructure projects. They are also tax-exempt. 

You can stay updated on the upcoming bond offers using this link. The prospectus will show you all the details you need to make an informed decision, like the maturity period, coupon rates (if it is already determined) when to receive the coupons, applicable tax, and when to receive the redemption payment (your initial investment amount).

When applying for bond investment, you need to indicate what bond you are interested in using the issue number, how much you are willing to invest (the face value), the duration, and other personal details. 

Like T-Bills, you also have a chance to choose a rate for your investment. If the bond has a pre-determined coupon rate from the prospectus, your only choice is the Non-Competitive/Average Rate applies. If the prospectus indicates the coupon rate will be market-determined, you can choose between the Non-Competitive/Average Rate or the Interest/Competitive Rate. 

Image @CBK,


The coupon rates for the bonds are quite friendly, with some hitting 12%. To invest in Kenyan T-Bonds, you need a minimum amount of Kes. 50,000.00.

You can rediscount your bonds, meaning selling the bonds back to the CBK if you are in a tight spot and need the money. However, the CBK will buy back the bonds at a low rate. This rate is set to encourage one to hold the bond until maturity. Alternatively, you can sell the bond in the secondary market, like the NSE, where other investors might buy it at a better price than the rediscounting rate. 

What Else Should You Know?   

The returns from government securities are lower than other investment assets like real assets, although the risk is lower and mostly guaranteed. Although the return is low, it is still better than having your money sit in a current bank account, earning little to no interest. Both the T-Bill and T-Bond application forms have an option of rolling over your initial investment plus the interest earned for re-investment. In the unfortunate event you die before your investments’ maturity date, it is important to have your will up to date, so your beneficiaries can claim these securities. 

Related article: What to consider before making investment decisions 

About M-Akiba

Unfortunately, not every Kenyan can afford to dish out Kes. 50,000.00 or above in a lump sum to invest in government securities. This left out the common mwananchi in such investment opportunities, and most government securities investments were for the wealthy investors, corporates, and foreign investors. 

That’s where M-Akiba comes in. 

It is a government initiative that allows Kenyans to invest in the government’s retail bonds through their mobile phones. The government usually uses the funds raised through M-Akiba to fund developmental and infrastructural projects.

With M-Akiba, you get to do everything from your mobile device, including account registration, buying, selling, and settling transactions. You can invest as low as Kes. 3,000.00. The maximum investment amount is Kes. 140,000.00 per day for every account. At maturity, you will receive your payments through your mobile phone. The returns for M-Akiba bonds is 10% per annum, with semi-annual coupon payments. The bonds are also tax-free. 

PS: While I have no personal experience with M-Akiba, I hope to have one soon enough and be able to offer my real-life experience and review. However, I would like to note that this is a great investment opportunity in government securities for low-income earners. When the government issues the next M-Akiba bond, you can consider investing the little you might have. The last M-Akiba 2 bond payout was done in September 2020

Disclosure: The information provided to my readers is genuine and precise to the best of my knowledge. The links provided in this article do not belong to any affiliate partners and I am not paid for them.


  • Issa mwiti

    December 7, 2020

    Very very resourceful and informative article..
    Well done and kip it up


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