How to Buy Treasury Bills in Uganda – Step-by-Step

Treasury bills (T-bills) are one of the safest ways to invest in Uganda. They are issued by the Government of Uganda through the Bank of Uganda and sold to investors via auctions every two weeks. If you’ve ever wondered how to actually buy a treasury bill, this guide walks you through the process step by step.

Step 1: Understand the Basics

Treasury bills are short-term government securities with three maturities:

• 91 days (3 months)

• 182 days (6 months)

• 364 days (1 year)

You don’t receive monthly interest. Instead, you buy the bill at a discounted price and get the full face value at maturity. The difference is your profit.

Step 2: Choose a Commercial Bank

You cannot buy treasury bills directly from the Bank of Uganda as an individual. Instead, you must go through a commercial bank.

• Primary Dealer banks (Stanbic, Standard Chartered, ABSA, Centenary, Equity, etc.) can place bids directly with the Bank of Uganda.

• Other commercial banks can also handle non-competitive bids for their customers.

Step 3: Decide Between Competitive or Non-Competitive Bids

• Competitive Bids: Only Primary Dealer banks can place these. They specify the exact yield they want.

• Non-Competitive Bids: Individuals and institutions use this option. All non-competitive bids are accepted at the auction’s cut-off price.

For most retail investors, non-competitive bids are the way to go.

Step 4: Meet the Minimum Investment

• Non-Competitive Bid Minimum: UGX 100,000 (and in multiples of UGX 100,000).

• Competitive Bid Minimum: UGX 200,100,000 (only for Primary Dealers).

This means you can get started with as little as UGX 100,000 through your bank.

Step 5: Submit Your Application Before the Deadline

• Fill out the treasury bill application form at your bank.

• Submit it along with your funds before the deadline.

• Deadlines are usually Wednesday at 10:00 AM on auction weeks.

Step 6: Wait for the Auction Results

• The Bank of Uganda announces results the same day.

• If your bid is successful, your account will be debited and you’ll receive a treasury bill certificate.

• At maturity, the bank credits your account with the face value of the bill.

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Example: How to Buy a 364-Day Treasury Bill

1. You walk into your bank and request to buy a 364-day treasury bill.

2. You fill in an application for UGX 1,000,000.

3. Suppose the auction cut-off yield is 15%. You will pay about UGX 870,000.

4. After one year, you’ll receive UGX 1,000,000.

5. Your profit (before tax) is UGX 130,000.

Withholding Tax on Treasury Bills

All treasury bill profits are subject to 20% withholding tax. The bank deducts this automatically.

Example:
Profit: UGX 130,000
Tax: UGX 26,000
Net Return: UGX 104,000

Final Thoughts

Buying treasury bills in Uganda is easier than many people think. With as little as UGX 100,000, you can take part in a safe, short-term government-backed investment.

👉 Stay ahead with updates on treasury bill auctions and results:

• Join our WhatsApp Group

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FAQs

1. What is the minimum amount to buy treasury bills in Uganda?
UGX 100,000, through non-competitive bids.

2. Can I buy treasury bills directly from the Bank of Uganda?
No. You must go through a commercial bank.

3. How long does it take to receive my money back?
It depends on the maturity: 91, 182, or 364 days.

4. Do treasury bills pay monthly interest?
No. They are bought at a discount and redeemed at face value.

5. How often are treasury bill auctions held?
Every two weeks, according to the Bank of Uganda auction calendar.