Treasury bills and government bonds: how they work, how to buy

Lending to your government

When you buy a government bond or bill, you lend money to the state. The investor-education website of Canada’s Ontario Securities Commission (OSC) puts it simply: “When you buy a bond, you’re lending your money to a company or a government (the bond issuer) for a set period of time (the term). In return, the issuer pays you interest.” On the maturity date, the issuer “is supposed to pay back the face value of the bond to you in full.”

Governments sell two main kinds of debt to the public:

• Treasury bills (T-bills) are short loans, usually for a year or less. They pay no separate interest: you pay less than the face value and receive the full face value at maturity. The Central Bank of Kenya (CBK) explains that investors “choose the amount that they will receive when the bill matures, or the face value of the bill, and pay less than that amount when purchasing it.”
• Bonds run for several years. Most pay a coupon — interest at a set rate, often every six months — and return the face value at the end.

Discount, coupon and yield

The yield is your return for a year, as a percentage. For a T-bill it comes from the discount. An illustration with made-up numbers: you pay 92,500 for a 364-day bill with a face value of 100,000. You earn 7,500, which is about 8.1% a year on what you paid (7,500 ÷ 92,500 × 365 ÷ 364). Quoted as a discount rate on the face value, the same bill shows about 7.5%. Central banks publish one or the other, so check which before you compare; the T-bill yield calculator converts between them.

For a bond, the coupon is a fixed percentage of the face value, but your yield depends on the price you pay. Buy below the face value and your yield is higher than the coupon; buy above it and your yield is lower.

Why prices move before maturity

If you keep a bond until it matures and the government pays, you get the face value back. If you sell earlier, you get the market price. The OSC: “In general, when interest rates rise, bond prices fall. When interest rates fall, bond prices rise.” It names two ways to lose money: selling “before the maturity date for less than you paid”, or the issuer defaulting on its payments.

Inflation matters too. The OSC’s example: “if you hold a bond paying 3% interest and inflation reaches 5%, your return is actually negative (-2%), when adjusted for inflation.” And “longer-term bonds tend to have higher returns and higher risk than shorter-term bonds.”

Buying directly: country by country

The details below are what each official page said on 18 October 2026. Rates change with every issue, and minimums and rules can change too, so check the page before you invest.

Kenya

• How: the CBK says individuals “can invest in Treasury bills without going through an intermediary” through its DhowCSD web portal and mobile app. They can also invest through Kenyan commercial and investment banks.
• T-bills: “Treasury bills mature in 91, 182 or 364 days”. They are auctioned every week, on Thursdays, and successful bids must be paid by 2pm on the following Monday.
• Minimum: “The minimum face value purchase for Treasury bills and bonds is Kshs. 50,000.00 for non-competitive bids and Kshs. 2,000,000.00 for competitive bids, and must be invested in denominations of Kshs. 50,000.00.”
• Bonds: terms have ranged “from one to 30” years, and most pay a fixed coupon every six months. The CBK notes that infrastructure bonds are tax-exempt and that each bond’s prospectus states the tax on its returns.
• The CBK “reserves the right to accept or reject bids in full or partially”.

Nigeria

• FGN Savings Bond: the Debt Management Office (DMO) offers it every month. In the October 2026 offer, the 2-year bond paid 13.071% a year and the 3-year bond 14.071%.
• Minimum: N1,000 per unit, with a minimum subscription of N5,000 and a maximum of N50,000,000.
• Payments: interest is “Payable Quarterly”, with “Bullet repayment on the maturity date” — the whole amount at the end. The bond is listed on the Nigerian Exchange.
• How: through the stockbroking firms the DMO appoints as distribution agents; their list is on the DMO’s website.
• Ordinary FGN bonds are aimed at much larger investors: the DMO’s page gives a minimum subscription of N50,001,000.

South Africa

• RSA Retail Savings Bonds are sold by the National Treasury: fixed-rate bonds for 2, 3 or 5 years, inflation-linked bonds and a Top-Up bond.
• Minimum: R1,000 for fixed-rate and inflation-linked bonds; R500 to open a Top-Up bond and R100 to add to it.
• Who: “Any individual who is a South African citizen with a valid Identity Number and who has a South African Bank account.”
• Rates: for October 2026, fixed-rate bonds paid 8.25% (2 years), 8.50% (3 years) and 9.00% (5 years). Interest is paid twice a year, on 31 March and 30 September, or monthly if you choose that option.
• Costs and exit: “There are no administrative fees payable.” The bonds are “non-tradable securities”: you cannot sell them to anyone else. You may withdraw after 12 months, with a penalty “equal to approximately one interest payment” on the amount withdrawn.

Mexico

• cetesdirecto lets individuals buy Mexican government securities directly. Accounts are run by the development bank Nacional Financiera, and the site states that the CNBV, Mexico’s banking and securities regulator, supervises it.
• Cetes are bought at a discount below their nominal value of 10 pesos, for terms of about one month (typically 28 days), three months (usually 91 days), six months and one year. Bonos pay a fixed interest rate every six months, for terms of 3 to 30 years.
• Minimum: from 100 pesos up to 10,000,000 pesos. The programme says it charges no fees for the account or for transactions.
• Who: Mexican nationals aged 18 or over, or foreigners with permanent residence in Mexico and the document that proves it, with an account at a bank in Mexico.

Egypt

The Ministry of Finance publishes a weekly auction schedule. For the week of 13 October 2026 it listed treasury bills of 91, 182, 273 and 364 days, plus fixed-rate, floating-rate and sukuk issues. We found no official page we could read that explains how individuals can buy them, so ask your bank.

Before you buy

1. Compare the yield with inflation, not only with a bank’s deposit rate; the real return calculator shows the difference.
2. Find out how the interest is taxed where you live.
3. Plan to hold until maturity. Selling early can cost money, and some retail bonds cannot be sold at all.
4. Buy through the official portal or a licensed bank or broker named on the official page.
5. Remember the currency: a bond in naira, shillings or rand loses value in dollars if that currency falls.