The Legal Edge

Questions and Answers :   1. What are Kenyan Treasury Bills?   Kenyan Treasury Bills (T-Bills) are short-term government securities issued by the Central Bank of Kenya on behalf of the National Treasury. They are typically issued with maturities of 91, 182, and 364 days and are used to help manage the country’s short-term funding needs. 2. How do Treasury Bills work?   Investors purchase T-Bills at a discounted price; they receive the face value upon maturity. The difference between the purchase price and the maturity value is the investor's return. 3. Who can invest in Treasury Bills? Both individual and institutional investors can invest in Kenyan T-Bills. This includes citizens, residents, and foreign investors. 4. What is the minimum investment for Treasury Bills? The minimum investment for Treasury Bills in Kenya is Ksh 100,000. 5. How are T-Bills issued? T-Bills are issued through an auction process held by the Central Bank of Kenya. Investors can place bids e...

    A Treasury bond, also known as a T-bond, is a government-issued security with a medium to long-term maturity. Typically, they pay interest every six months until the bond reaches maturity.In Kenya, Treasury bonds are issued on a monthly basis. T-Bills are sold at a discount to their face value and redeemed at face value upon maturity.For example, a Ksh.100,000 T-Bill might be sold for Ksh.90,000. At maturity, the investor receives the full Ksh.100,000.The return is subject to a 15% withholding tax. Auction Frequency:T-Bills are auctioned by the Central Bank of Kenya on a weekly basis.Purpose of Government Issuing T-Bills:The government issues T-Bills to raise funds for various projects, which is part of its domestic borrowing strategy.   In summary, while both Treasury Bills and Treasury Bonds offer fixed returns, they differ in terms of their structure, investment duration, and frequency of issuance. Treasury Bills are typically for short-term financing, while Treasu...