Auction of 91-Day, 182-Day and 364-Day Treasury Bills 

The Central Bank of Kenya is putting 91-Day, 182-day and 364-Day treasury bills on auction this Thursday 29th July with the value dated set on next Monday 2nd August. The previous average interest rates of the bills were 6.477%, 6.955%, and 7.432%, respectively. 

What are Treasury Bills 

Treasury Bills are secure, short-term investments on which you can get returns after only a relatively short commitment of funds. The treasury bills rates of the Central Bank of Kenya are very attractive. They provide a very good opportunity to invest in a financial asset that is very easily accessible and that are auctioned every week. 

These assets are sold at a discount. Investors can choose whether they wish to receive an amount they have previously chosen or the face value of the bills once they have matured, hence paying less than what they originally paid for them. 

Who can invest in Treasury Bills from the Central Bank of Kenya 

Both individuals and corporate entities can invest in the Treasury Bills issued by the Central Bank of Kenya as a nominee of a commercial bank or investment bank in Kenya. However, in case you already have a bank account with a local commercial bank, you can invest directly in the bills  via the Central Bank of Kenya and hence avoid additional fees. 

How to invest in Treasury Bills issued by the Central Bank of Kenya 

Open a CDS Account 

In order to be able to invest in the bills, an individual or corporate body should firstly open a CDS account with the Central Bank of Kenya, which is free of charge. This step is very important, as it enables the Central Bank to keep a record of who holds which government securities. Once you have opened the CDS account, you can invest in multiple Treasury bills and government bonds. It is mandatory to have a bank account with a Kenyan commercial bank in order to open the CDS account. 

• Collect a mandate card from the Central Bank of Kenya or any of its branches and fill it in block letters. Find a sample mandate card HERE. 
• You will also need two signatories from the Kenyan commercial bank where you have an account to verify that the information you have provided is genuine. 
• Attach two passport-sized photos of yourself that have been stamped and certified by a representative from your commercial bank. 
• Submit a clear copy of your National ID Card, Passport or other acceptable identification documents. 

Invest in Treasury Bills or Bonds 

Once you have your CDS Account, you can invest in Treasury Bills or Bonds. The Central Bank of Kenya offers bills every week with a maturity period of 91 days, 182 days and 364 days, respectively.  

You can find all the bills on offer HERE. 

Choose the bill you wish to invest in and fill in a treasury bill application form. You can find the form HERE. 

When filling in the form, you will have to choose a rate, which will determine how much you will have to pay for the bill and hence your net profit when the treasury bills mature. Your two options are: Interest/Competitive Rate or the Non-Competitive/Average Rate. 

You have to submit the completed application form to the Central Bank’s head office or any branches at latest by 2pm on Thursdays. 

Get the results 

The results of the auction are published via the Treasury Mobile Direct (TMD), Twitter and in the statistics section of the Central Bank of Kenya’s website. 

Payment 

The payment for treasury bills auctions closes on the next Monday at 2pm. Payments can be made in cash or banker’s cheques for amounts less than Kshs.1 Million and via a KEPSS transfer for larger amounts. 

Failure to proceed with payments within the payment period can result in being barred from future investment opportunities. 

Maturity Proceeds 

When the treasury bills mature, the proceeds will be deposited to the commercial bank account you used to open your CDS account. 

Investors also have the option to invest their securities directly into new bills.  

How Valsen Can Help  

The experienced staff of Valsen Fiduciaries Group our global network allow us to provide high-quality services in several jurisdictions. We are at your disposal to help you invest in treasury bills from the Central Bank of Kenya. Please contact us through info@valsenfiduciaries.com or +248 2 525 217.