Investing in bonds in Kenya and various types of bonds

*Basic notes on treasury bonds and bills*

Investing in treasury bills and bonds is lending money to the government 

*Treasury bonds*

1. Bonds are offered every month. See newspapers or cbk website

2. Their maturity is 2yrs and above

3. Bonds vary: fixed (10%/15% withholding tax) or infrastructure (tax free)

4. Minimum investment is 50,000 known as face value. Maximum is 20m for individuals per bond on offer.

5. Interest is paid to your bank account twice a year, until maturity of the bond e.g. if interest p.a. is 20,000...you get 10,000 every six months, paid directly to your bank on the due date, mostly a Monday

6. Good for capital preservation while earning passive income

7. It gives your money work to do

8. Think longterm. You could arrange it such that you receive payouts every month

*Treasury bills/T-bills*

1. T-bills are issued on weekly basis, throughout the year. See cbk website and newspaper

2. Maturity ranges from 91, 182, 362 days

3. There is 15% withholding tax

4. Minimum investment is 100,000 face value, with a maximum of 20m for individuals per T-bill offered 

5. Good for capital preservation while earning an income 

6. It gives your money work to do

*How to buy into the offers*

1. These steps apply to both bills and bonds

2. You need to open a cds account with cbk. It takes about 7 days from the submission of the filled form

3. Once your cds is ready, they send your details, including details of your virtual account for the transactions

4. You can now buy treasury bonds and bills

5. Identify the T-bond and T-bill you wish to take up

6. Fill the bond application, indicating the desired face value and select/indicate average on the rates; submit it by Treasury Mobile Direct (TMD), online or physically before indicated deadline for auction

7. After auction, check your sms or walk in/call/email cbk to find out the outcome of your bid and exact amount to pay

8. Make payment before the following Monday 2pm, in cash, cheque or rtgs. If you have online banking, send rtgs directly to the virtual account issued to you by CBK

9. Payments of 1m and below can be paid in cash at the cbk banking Hall *Yes, you can actually enter cbk banking hall*

10. Wait for the interest to be paid on the indicative dates on the prospectus and congratulate yourself for the passive income

11. On maturity, the principle aka face value is credited to your bank account 

12. Visit cbk online or physically for more details

*Basic notes on treasury bonds and bills*

Investing in treasury bills and bonds is lending money to the government 

*Treasury bonds*

1. Bonds are offered every month. See newspapers or cbk website

2. Their maturity is 2yrs and above

3. Bonds vary: fixed (10%/15% withholding tax) or infrastructure (tax free)

4. Minimum investment is 50,000 known as face value. Maximum is 20m for individuals per bond on offer.

5. Interest is paid to your bank account twice a year, until maturity of the bond e.g. if interest p.a. is 20,000...you get 10,000 every six months, paid directly to your bank on the due date, mostly a Monday

6. Good for capital preservation while earning passive income

7. It gives your money work to do

8. Think longterm. You could arrange it such that you receive payouts every month

*Treasury bills/T-bills*

1. T-bills are issued on weekly basis, throughout the year. See cbk website and newspaper

2. Maturity ranges from 91, 182, 362 days

3. There is 15% withholding tax

4. Minimum investment is 100,000 face value, with a maximum of 20m for individuals per T-bill offered 

5. Good for capital preservation while earning an income 

6. It gives your money work to do