How to buy government bonds in Kenya via CBK is one of the most common questions among new and experienced investors looking for low-risk, reliable returns. Government bonds are among the safest investments in Kenya because they are backed by the government, and they pay consistent interest (called coupon payments).
This guide explains how the process works, the requirements, the types of bonds available, and a clear step-by-step method to buy them through the Central Bank of Kenya (CBK).
Understanding Government Bonds in Kenya
Government bonds are long-term debt securities issued by the National Treasury through CBK. When you buy a bond, you are lending money to the government for a fixed period. In return, you earn interest every six months until maturity.
Why Invest in Government Bonds?
Government bonds are popular because they are:
- Low-risk – backed by the Government of Kenya
- Stable – predictable interest income
- Accessible – minimum investment starts at KES 50,000
- Transparent – issued and regulated by CBK
- Flexible – various maturities (1 to 30 years)
These benefits make bonds ideal for long-term wealth building, retirement planning, and diversification.
Types of Government Bonds Offered by CBK
CBK issues several types of government bonds. Understanding them helps you choose the best fit for your goals.
1. Fixed-Coupon Bonds
These bonds pay a fixed interest rate throughout their life. They offer predictable returns and are ideal for stable income.
2. Floating Rate Bonds
Their interest rates fluctuate based on market conditions. They protect investors during times of rising interest rates.
3. Infrastructure Bonds (IFBs)
These are tax-free bonds used to fund infrastructure projects such as roads, energy, and water systems.
They are highly popular because:
- Interest is exempt from withholding tax
- They often offer high coupon rates
4. Zero-Coupon Bonds
These do not pay periodic interest. Instead, they are sold at a discount and redeemed at face value.
Requirements to Buy Government Bonds in Kenya
CBK has made the process accessible even for ordinary Kenyans. To invest, you need:
For Kenyan Citizens
- National ID
- KRA PIN
- Passport-sized photo
- Bank account in Kenya (for interest and principal payments)
For Diaspora Investors
- Passport
- Certified KRA PIN
- Completed mandate card
- Kenyan bank account
- Notarized documents (depending on embassy requirements)
Step-by-Step Guide on How to Buy Government Bonds in Kenya via CBK
Below is the complete investment process from registration to receiving returns.
Step 1: Open a CDS Account with CBK
A Central Depository System (CDS) account is required to hold your bonds. It is free and easy to open.
How to open a CDS account
- Download CDS account forms from the CBK website or collect them from CBK branches.
- Fill in your details.
- Attach copies of your ID/passport, KRA PIN, and a passport photo.
- Provide your bank details.
- Submit the form physically to CBK or any branch of a designated commercial bank.
Within a short time, your CDS account is activated.
Step 2: Follow Upcoming Bond Announcements
CBK publishes weekly or monthly bond sale announcements through:
- Daily newspapers
- CBK website
- Public bonds calendar
Each announcement includes:
- Bond type
- Coupon rate
- Tenor (duration)
- Auction date
- Deadline for bidding
- Minimum investment (usually KES 50,000)
Step 3: Fill in the Bond Application Form
This form is also known as the Treasury Bond Bid Form.
You must indicate:
- Your CDS account number
- Bond issue number
- Tenor
- Amount you want to invest
- Your bid type (competitive or non-competitive)
Non-Competitive Bid
- Best for beginners
- You accept the average market rate
- Ensures allocation as long as you meet requirements
- The maximum allowed is KES 20 million
Competitive Bid
- You set your preferred interest rate
- Suitable for experienced investors
- Risk of missing out if your rate is too high
Step 4: Submit the Application Before the Deadline
Submit the form to CBK by:
- Visiting a CBK branch
- Using your commercial bank (for supported banks)
CBK closes applications at 2:00 PM on auction day.
Step 5: Wait for Auction Results
After the auction, CBK announces:
- Successful bids
- Cut-off interest rates
- Average rates
- Total bids received
If your bid is accepted, you must proceed to payment.
Step 6: Make Payment for the Bond
Payment is due on the value date indicated in the auction announcement.
You pay through:
- Bank transfer
- RTGS
- Direct debit (for some banks)
Late payments lead to cancellation.
Step 7: Start Earning Interest
Once payment is confirmed:
- CBK credits the bonds to your CDS account
- You start receiving interest every six months
- Upon maturity, the principal is deposited into your bank account
For infrastructure bonds (IFBs), interest payments are tax-free.
How Much Money Do You Need to Buy Bonds?
- Minimum investment: KES 50,000
- Additional investment must be in multiples of KES 50,000
For treasury bills, the minimum is KES 100,000 — but this article focuses on bonds.
Costs and Taxes to Consider
Most bonds have:
- Withholding tax:
- 10% for bonds with maturity above 10 years
- 15% for bonds below 10 years
- Infrastructure bonds:
- Fully tax-exempt
There are no annual account fees for your CDS account.
Can You Sell Your Bond Before Maturity?
Yes, you can.
Government bonds are tradable in the secondary market through the Nairobi Securities Exchange (NSE). This gives you liquidity if you need cash before maturity.
However:
- Prices may be higher or lower than your purchase price
- A licensed broker or bank facilitates the sale
Tips for Successful Bond Investing
To maximize returns:
1. Choose Longer-Term Bonds
They often offer higher interest rates and lower taxes.
2. Monitor CBK Issuance Calendar
Plan your investments around upcoming issues.
3. Prioritize Infrastructure Bonds
They give you tax-free income, making them very attractive.
4. Use Non-Competitive Bids If You’re a Beginner
It ensures allocation and simplifies the process.
5. Reinvest Coupon Payments
Compounding builds wealth faster.
Final Thoughts
Buying government bonds in Kenya via CBK is one of the safest and most reliable ways to grow your wealth. The process is transparent, secure, and accessible even to ordinary Kenyans. With a minimum of KES 50,000, anyone can start earning steady returns backed by the government.
By understanding the steps — from opening a CDS account to bidding, paying, and receiving interest — you can make confident, well-informed investment decisions.
Join Our Telegram Channel
Vincent Nyagaka is the founder of Chweya, where he breaks down complex financial topics into simple insights. A trader since 2015, he uses his market experience to help readers better understand investing, trading, and personal finance.