Which Is Better for Kenyan Investors? (2025 Guide)
In 2025, Kenyan investors are increasingly turning to government securities—Treasury Bonds and Treasury Bills—as safe, predictable ways to grow their money. But while both are backed by the government and issued by the Central Bank of Kenya (CBK), they serve different goals and suit different investor profiles.
This guide compares the two instruments in terms of maturity, returns, risk, taxation, and liquidity, helping you decide which fits your financial strategy.
1. Key Differences at a Glance
| Feature | Treasury Bills (T-Bills) | Treasury Bonds (T-Bonds) |
|---|---|---|
| Maturity | Short-term: 91, 182, or 364 days | Medium to long-term: 1 to 30 years |
| Return Type | Sold at a discount, paid at maturity | Fixed interest paid semi-annually |
| Risk Level | Low | Low |
| Taxation | 15% withholding tax on interest | 10% for bonds ≥10 years; 15% for <10 years |
| Minimum Investment | KSh 100,000 | KSh 50,000 |
| Liquidity | High (short duration) | Moderate (can be traded on secondary market) |
2. Treasury Bills: The Sprinter’s Choice
How They Work:
- You buy a bill at a discount (e.g., pay KSh 95,000 for a KSh 100,000 bill).
- At maturity, you receive the full face value—the difference is your return.
Ideal For:
- Parking funds short-term
- Saving for near-term goals (e.g., school fees, business capital)
2025 Snapshot:
- 91-day bill: ~9% return
- 182-day bill: ~9.4%
- 364-day bill: Being phased out
3. Treasury Bonds: The Marathoner’s Pick
How They Work:
- You earn fixed interest every six months (coupon payments).
- At maturity, you get back your initial investment.
Ideal For:
- Long-term goals like retirement, property, or education
- Passive income seekers
2025 Snapshot:
- 20-year bond: 13.2% coupon rate
- 25-year bond: 13.4% coupon rate3
- Infrastructure bonds: Tax-free interest, high demand
4. Which Is Better?
Choose T-Bills if:
- You want short-term returns
- You prefer frequent reinvestment
- You need high liquidity
Choose T-Bonds if:
- You’re saving for long-term goals
- You want regular income
- You’re looking for higher yields
Pro Tip:
Many investors mix both—using T-Bills for short-term cash flow and T-Bonds for long-term growth.
5. How to Invest
- Open a CBK DhowCSD account via CBK’s portal
- Monitor weekly T-Bill and monthly T-Bond auctions
- Place bids via mobile app, web portal, or USSD
- Choose competitive or non-competitive bids
- Pay via bank transfer or RTGS if successful
Final Thoughts
Both Treasury Bills and Bonds are low-risk, government-backed investments—but they serve different purposes. In 2025, with interest rates stabilizing and inflation easing, bonds are gaining favor for their real returns, while bills remain a favorite for short-term liquidity.
