This archive report was first published on 27 September 2019.
Published on September 27, 2019, the Central Bank of Kenya issues Treasury Bills to borrow funds from the public, typically to finance short-term debt such as salaries.
Treasury Bills are similar to working capital finance in a business, with the government using them to raise funds for a short period.
The main difference between Treasury Bills and Treasury bonds is the duration of the investment. Treasury Bills are issued for short periods, usually to finance short-term expenditure.
When investing in a Treasury Bill, you pay a discounted price upfront, and at the end of the investment period, you receive the face value of the Bill, plus the interest earned.
For example, if you invest Sh100, 000 in a one-year Treasury Bill with a 10% interest rate, you will pay approximately Sh90, 000 upfront and receive Sh100, 000 at the end of the year, plus the interest earned.
The discount you receive depends on the duration of the investment, with longer-term investments offering higher discounts.
Treasury Bills are considered safe investments, but they may not provide extremely high returns. However, they can be a good option for short-term investments, offering a stable return on your money.
Currently, the 91-day Treasury Bill is returning around 10% per annum, which is higher than what you may earn with a savings account.
To invest in Treasury Bills, you need to open a CDS account with the Central Bank, and the minimum investment required is Sh100, 000.
