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Kenya Treasury Bills vs Bonds: How to Invest and Compare Returns
7 min read · Updated 15 October 2026 · More banking & mobile money
Government securities are one of the safest places to put money in Kenya because they are backed by the government. The two main types are Treasury Bills, which are short term, and Treasury Bonds, which are longer term.
This guide explains how each works, how T-Bills are priced at a discount, how withholding tax applies, and how to invest through the Central Bank of Kenya's DhowCSD platform.
Treasury Bills vs Treasury Bonds
| Feature | Treasury Bills | Treasury Bonds |
|---|---|---|
| Tenor | 91, 182 or 364 days | Two years and above |
| How returns work | Bought at a discount, redeemed at face value | Periodic coupon interest, plus maturity value |
| Withholding tax | 15% on the discount | 15% on coupons, 0% for IFBs |
| Typical minimum | KSh 100,000 | KSh 50,000 |
| Platform | DhowCSD | DhowCSD |
How T-Bills are priced
You do not pay the face value up front. Instead you pay a discounted price and receive the full face value at maturity. The discount is your return.
Good to know: Discounted price = Face value / (1 + (Annual rate x Days / 365)). The difference between face value and the price you pay is your gross interest.
Worked example: a 364-day T-Bill
Assume a KSh 100,000 face value at an annual rate of 9.0352% (the CBK 364-day average for the 15 October 2026 auction) for 364 days.
| Item | Amount |
|---|---|
| Face value | KSh 100,000 |
| Discounted price paid | about KSh 91,734 |
| Gross interest | about KSh 8,266 |
| Withholding tax (15%) | about KSh 1,240 |
| Net interest | about KSh 7,026 |
Why tax-free Infrastructure Bonds (IFBs) matter
IFBs carry 0% withholding tax, so the effective return can beat a taxable bond or a bank fixed deposit with a similar headline rate. Because interest on most bank deposits and taxable bonds is subject to 15% tax, a tax-free IFB at a slightly lower rate can still deliver more into your pocket.
How to invest
- Register on DhowCSD, the Central Bank of Kenya's online portal.
- Fund your account, then bid in the weekly auctions for T-Bills or the announced bond sales.
- For T-Bills, competitive and non-competitive bids are available.
- Hold to maturity or sell on the secondary market, where prices can move with interest rates.
Good to know: Rates change at every auction. Check the latest CBK auction results before you bid.
Quick Answers
Kenya Treasury Bills vs Bonds: How to Invest FAQs
What is the minimum to invest in Kenya Treasury Bills?
The minimum is typically KSh 100,000 for Treasury Bills and KSh 50,000 for Treasury Bonds, subject to current CBK rules.
Are Treasury Bills taxed in Kenya?
Yes, T-Bill interest is subject to 15% withholding tax. Infrastructure Bonds (IFBs) are tax-exempt, which is a key advantage.
Is it better to buy T-Bills or a fixed deposit?
It depends on rates and tax. Government securities are very low risk, and tax-free IFBs can beat taxed fixed deposits. Compare net returns after tax before deciding.