Many potential investors are stuck with their money for they don’t know where to invest it! There are a number of investment opportunities that can make huge returns on investment that are not properly told.
Investing in government Treasury Bills is one of the investment opportunities smart investors should consider venturing into.
In developing countries like Uganda, these investment options are exploited by a few because many would-be investors are ignorant about how Treasury Bills work and how can reap from them. In simple terms, Treasury Bills are short-term (usually less than one year) maturity promissory notes issued by a national government as a primary instrument for regulating money supply and raising funds via open market operations.
Issued through the country’s Central Bank (in Uganda’s case Bank of Uganda), T-Bills commonly pay no explicit interest but are sold at a discount, their yield being the difference between the purchase price and the par-value (also called redemption value).
T-Bills are very popular with institutional investors because, being backed by the government’s full faith and credit, they come closest to a risk free investment.
Uganda’s T-Bills are spread across three tenors; 91 days (three months), 182 days (half year) and 364 days (one year). The Bank of Uganda usually auctions T-Bills on a weekly basis.
Charles Nsamba, the Communication & Public Relations Manager at Capital Markets Authority (CMA) explains that investing in government Treasury Bills is quite easy so much that anyone can invest in them for as low as Shs100, 000.
“All you need is to visit one of the primary dealers and open a Central Securities Depository account with them, which you then use to trade,” Nsamba says, adding that Primary dealers are six including Stanbic bank, dfcu, Stanchart, Barclays, Bank of Baroda, and Centenary Bank.
He explains that any individual above 18 years of age or registered persons including institutions like a SACCO, or investment group can invest in government securities.
“Investing is government securities is generally considered risk free because these instruments are back up by the full force of the Government. Secondly, they offer competitive returns when compared to other investments and I would encourage all those who are thinking of investing, especially in financial markets for the very first time, to consider investments in government instruments,” he explains, adding: “Gradually, they will start to appreciate financial products and we’ll start to see people move into more sophisticated and riskier products like shares and derivatives.”
Emphasizing the issue of risks, he said: “… in recent times, we have seen Governments defaulting, but this is common in politically unstable areas. In East Africa, we have not experienced any defaults.”
6 thoughts on “Investor’s Guide: How To Make Clean Money From Treasury Bills”
Need to invest in treasury bill s,via Stanbic Bank Uganda
I want to invest 10m in treasury bills how much will I get after 1 year
I want to invest 500million ugx in treasury bills.
How much will I make in actual gain after tax and other deductions in 91 days
the gain will be 10.8m then if you subject it to 15% withholding tax you will remain with 9.18m
I want to invest my 50 million.How much interest can it generate after 6 months?
I want to invest 30m in T- bills. How much interest can it generate after 6 months. thanks.