What if I told you that the government is paying up to 13% interest — guaranteed — and you don’t need millions to get started?
That’s right! The Central Bank of Kenya (CBK) regularly issues Treasury bonds that let you lend money to the government in exchange for interest paid every six months. It’s one of the safest and most reliable ways to grow your money in Kenya.
In this article, we’ll break down:
- What Treasury bonds are
- The bonds currently on offer
- How much you can earn
- How to invest step-by-step
What Are Treasury Bonds?
Treasury bonds are long-term government securities that pay investors a fixed rate of interest (called a coupon rate) every six months until maturity.
In simple terms, you’re lending money to the government, and in return, it pays you interest plus your principal amount when the bond matures.
These investments are backed by the government, making them among the lowest-risk options in Kenya’s financial market.
October 2025 Bonds on Offer
The CBK reopened two fixed coupon bonds this month:
| Bond Name | Tenor | Time Left | Coupon Rate | Maturity | Tax |
| FXD1/2018/15 | 15 years | 7.7 years | 12.65% | May 2033 | 10% |
| FXD1/2021/20 | 20 years | 15.9 years | 13.444% | July 2041 | 10% |
Both are fixed coupon bonds, meaning your interest rate remains the same throughout the bond’s life, no matter how the market moves.
How Bonds Work in Kenya: Guide to understanding Bonds
How Much Can You Earn?
The minimum investment for Treasury bonds in Kenya is KSh 50,000 (non-competitive bid). Here’s what your returns would look like:
| Investment | Bond | Annual Return (Before Tax) | Annual Return (After 10% Tax) | Semiannual Payout |
| KSh 100,000 | 12.65% Bond | KSh 12,650 | KSh 11,385 | KSh 5,692 |
| KSh 100,000 | 13.444% Bond | KSh 13,444 | KSh 12,100 | KSh 6,050 |
| KSh 1,000,000 | 12.65% Bond | KSh 126,500 | KSh 113,850 | KSh 56,925 |
| KSh 1,000,000 | 13.444% Bond | KSh 134,440 | KSh 121,000 | KSh 60,500 |
So, an investor with KSh 1 million in the 13.444% bond can earn over KSh 120,000 per year — all while keeping their principal safe.
Why the Government Issues Bonds
You might wonder, why does the government borrow money from the public instead of banks?
The answer is simple: budgetary support. Funds raised from Treasury bonds go toward projects like infrastructure, education, and healthcare.
When you buy a bond, you’re helping fund national development, and earning guaranteed returns in the process.
Important October 2025 Dates
- Auction opens: September 26, 2025
- Bidding closes: October 15, 2025 (by 10:00 a.m.)
- Payment date: October 17, 2025
- Settlement date: October 21, 2025
Missing these dates means you’ll have to wait for the next bond issue.
Treasury Bonds vs. Money Market Funds: Which is Better?
How to Invest in Treasury Bonds in Kenya
Here’s the step-by-step process for new investors:
- Open a CDS Account with the Central Bank of Kenya (CBK).
- You can do this directly through the CBK’s DhowCSD app or by visiting your bank or stockbroker.
- This account is different from the CDSC account used for shares.
- Review the current bond offers on the CBK website or financial news sources.
- Decide on your investment amount.
- Minimum: KSh 50,000
- You can invest more in multiples of KSh 50,000.
- Submit your bid (competitive or non-competitive).
- New investors usually go for non-competitive bids, meaning you accept the market rate.
- Receive payment instructions from CBK via email once your bid is accepted.
- Pay through your bank before the settlement date.
- Start earning interest — paid every six months directly into your bank account.
Risks and Rewards
While Treasury bonds are low-risk, they’re not entirely risk-free. The main risks include:
- Interest rate risk: If market rates rise, your bond’s resale value may drop.
- Liquidity risk: Selling before maturity can be challenging.
Still, government default is historically rare in Kenya, making bonds a reliable, long-term option.
Who Should Consider Investing in Bonds?
Treasury bonds are ideal for:
- Investors seeking steady, predictable returns
- Retirees or long-term savers
- Anyone looking for low-risk, government-backed income
- Those building a diversified investment portfolio
Watch the Full Video Guide
Want to see exactly how it works? Watch the full video here:
How to Invest in Treasury Bonds in Kenya (Earn Up to 13% Guaranteed Returns)
You can also check out:
Final Thoughts
If you’ve been looking for a safe and smart way to grow your money, Treasury bonds are worth considering. With returns of up to 13%, semiannual payouts, and government backing, they’re one of the easiest ways to start investing confidently in Kenya.
Before investing, always do your research and ensure your goals align with the bond’s duration and risk level.