T-Bills
What are T-Bills?
Treasury bills (T-Bills) are a secure, short-term investment, offering you returns after a relatively short period of commitment of funds.
T-Bills are offered by the Central Bank of Kenya.
When you lend the government money in the form of T-Bills, you will receive your money back plus interest accrued over the specified tenor (length of time until the T-Bill is due to mature).
For example, in Kenya T-Bill tenors are classified into;
- 91 days
- 182 days
- 364 days
Treasury bills are auctioned at a discount. When the T-Bill matures you get the face value of your investment (minimum KES 100,000). To better understand how you make returns and how much to expect to use this CBK calculator https://www.centralbank.go.ke/bills-bonds/treasury-bills/
There are two kinds of treasury bills
- Competitive bidders - investors quote a price or interest rate. Investors must indicate the desired price/yield and usually monitor and understand the movements in interest rates and market conditions. However, such bids may either be accepted or rejected depending on interest rates and liquidity levels. There is no maximum amount per bid per investor for competitive bidders.
- Non-competitive bidders - Investors in this category are price takers and depend on the market outcome. Placement in this type of T-Bills is always guaranteed. However, the maximum amount one can invest per CDS account per issue/tenor is 20,000,000.
To start investing in T-Bills you will need KES 100,000. Subsequent bids will be done in multiples on KES 50,000.
Example;
- Enter Face Value as 100000
- Enter Rate as 7.195
- Select days as 182 Days
- Click calculate.
How do I Invest in T-Bills on Abacus?
On the Web platform, click on Bills/Bonds;
How do I get my maturity proceeds?
At the end of the 91-, 182- or 364-day period, the face value amount of the bill will be remitted into your Abacus trading account. An Investor may choose to roll over their securities into a new forthcoming issue and in this case, they have to complete an application form giving rollover instructions and send them to Abacus before the closure of the period of sale for that bill.
Related Articles
Intra Day Trading
Intraday trading refers to same-day trading whereby you can be able to buy shares and sell them within the same day. Currently, settlement (actual transfer of shares from the previous owner to you) takes 3 working days. The good news is that the ...How Do I invest When I Can’t Afford To Invest?
It’s easy to say this when you’ve lived through 2019, it’s the end of the year, and you’re flat broke. You’re more concerned with surviving and maybe saving … how do we even start to think about investing? Here’s the thing though. As long as you’re ...Getting Started On Abacus
How to use Abacus Web Platform & Mobile App Features on our Platforms include but are not limited to; Dashboard This is where you get to see an overview of; Money Talk Question of the Day NSE 20 Share Index NSE All-Share Index FTSE NSE Kenya Share ...How To Start Investing
Here you will get to understand how to fill your profile, deposit/fund your account, and get started on Investing. Updating Your Profile Before you begin investing, you will have to update your profile. On the Web Platform, go to the upper ...Charges For Investing On Abacus
Charges are: 1: Brokerage Commission of 1.76%. 2: CDSC Transaction Levy: 0.08%. 3: CMA Guarantee Fund: 0.01%. 4: CMA Transaction Levy: 0.12%. 5: CDSC Guarantee Fund: 0.01%. 6: NSE Transaction Levy: 0.12%. 7: Stamp Duty: KES 2 for every KES 10,000. 8. ...