How To Calculate Treasury Bills In Kenya

How To Calculate Treasury Bills In Kenya

Treasury bills are fixed-interest securities issued by the government.

In this article Keweb. co tries to answer the question by publishing the ways one can calculate treasury bills in Kenya

Below are the most helpful ways to calculate treasury bills in Kenya

Step 1: Check for the treasury bills on offer

Go here to check the treasury bills on offer at the moment.

From the website, you can also learn about the sizes of offers available, dates of the auction, periods of sale, etc.

You should have decided on the maturity length you desire based on recent interest rates- this should give you a good idea of what you can expect in the upcoming auctions.

Keep in mind that the least face value you can purchase when it comes to Treasury bills in Kenya is Kshs.100,000 (and you invest in multiples (denominations) of Kshs.50,000.

Your initial investment should obviously be less than your desired face value (I already explained the reason for this).

Step 2: Acquiring and completing a Treasury bill application form

The next thing you do is download the treasury bill application form from the CBK website (

You must fill in the form appropriately (you need to enter information such as your name, mobile number, your CDS account number, and more).

Importantly, you are provided two options when selecting a rate – remember this determines the amount you will be paying for the treasury bill and, hence, your eventual return on the bill.

To be clear, you should choose either the Interest/Competitive Rate or the Non-Competitive/Average Rate.

Here is the difference between these two rates:

If you select Interest/Competitive Rate when bidding, you sort of specify the interest rates you’d like to earn.

Subsequently, the Central Bank will decide on what bids it shall accept and sets a cutoff- this means that Investors who submitted an interest rate above that cut-off will not receive bills from the auction.

On the converse, if you select Non-Competitive(Average Rate) you’re guaranteed to get Treasury bills during the auction.

The only downside is that the interest rate will be computed as a weighted average (of the bids accepted from all the investors who submitted Interest/Competitive rates).

Side note: maximum face value you can quote for Non-Competitive (Average Rate) bids is Kshs.20 million.

Step 3: Submit your Treasury bill application form

You should then submit your completed application form to CBKs head office (or one of the branches) by 2 p.m. by the next Thursday for 91, 182, or 364-day bills.

Step 4: Waiting for the auction results

After the auction, you need to either call/visit the CBK or its branches (Nairobi, Mombasa, Eldoret, Kisumu, or Meru, Nakuru, Nyeri) to find out if your application was successful and how much you owe for the successful Treasury bills bid.

Step 5: Paying the bills

You must submit your payment by 2 pm (on the Monday following the auction) or by the following Tuesday (If Monday was a public holiday).

In most cases, payment is done using a cheque if it is Kshs. 1 million (or less) and via electronic bank transfer for larger amounts.

A word on treasury bills’ maturity

At the expiry of the 91, 182, or 364 days, the face value/amount of your bill is remitted into your commercial bank account (the one stated on your CDS account).

Alternatively, you may choose to roll over the investment (reinvesting the matured value) to the next treasury bills auction- in which case, you need to fill out an application form instructing CBK to roll over the investment (submit it before the closure of the sale period for the new bill).

Please note that in case of a rollover, CBK won’t remit the maturing proceeds into your bank account – it only remits refund amounts generated due to the new investment.

Side Note: The date of maturity (of your maturing investment) and the specified value date (of the new bill) need to match for the requested rollover to be successful.

How to calculate treasury bills in Kenya

Let’s assume that our bidding price was Ksh 100,000 and a rate of 1.5% carried the day while the maturity period is 182 days (half a year)…

Our discount will be;

100,000(face value) *182/364(half year) * 0.015(rate p.a.) = 750.

Implying that we shall pay the government Ksh 100,000 – Ksh 750 = Ksh 99,250 and in turn, we receive Ksh 100,000 after 182 days.