Bank of Uganda Bond Rates Explained (Current & Historical)

Bank of Uganda (BOU) treasury bonds are one of the safest and most rewarding ways Ugandans can invest. But to invest wisely, you need to understand one key thing — the bond rate. Here’s a simple explanation of what that means, how it changes, and how it affects your money.

What Are Bank of Uganda Bond Rates?

Treasury bonds are long-term loans you give to the government. In exchange, the government pays you back with interest every six months, then returns your original money at the end.

The bond rate — also called the coupon rate — is the fixed percentage of interest you’ll earn every year based on the bond’s face value.

For example, a 15% bond pays you UGX 150,000 per year for every UGX 1,000,000 you invest.

Current Bank of Uganda Bond Rates (2025)

As of early 2025, here are the approximate annual interest rates:

2-Year Bond: 14.75%
5-Year Bond: 15.80%
10-Year Bond: 16.50%

You can find the most updated figures on:

The Bank of Uganda auction results page
Your Level Africa account dashboard, which shows current earnings estimates

How Bond Rates Are Determined

Bond rates are not randomly assigned. They are determined through public auctions held by the Bank of Uganda.

Here’s how it works:

The government says, “We want to raise X billion shillings.”
Investors (banks, institutions, and individuals) submit bids.
The final rate — called the cut-off yield — is the average rate accepted by BOU.
Everyone who invests at that round earns the coupon rate based on this cut-off.

This is why rates can slightly vary from one auction to another.

Historical Bond Rate Trends in Uganda

Over the past 5–10 years, bond rates have generally stayed within this range:

2-Year Bonds: 11%–15%
5-Year Bonds: 12%–16%
10-Year Bonds: 13%–17%

Rates tend to go up when inflation or government borrowing rises.

What These Rates Mean for You

High bond rates might seem attractive — but they must be looked at in context:

If inflation is 8% and your bond pays 15%, your real return is about 7%.
But if inflation rises to 14%, then your real return drops to 1%.

That’s why it’s important to think long-term and choose bonds that beat inflation.

Example: Investing in a Bond with a 15% Rate

Let’s say you invest UGX 1,000,000 in a 2-year treasury bond at 15%:

You earn UGX 75,000 every 6 months
That’s UGX 150,000 total per year
After 2 years, you get UGX 1,000,000 back

Keep in mind, a 15% withholding tax applies on your interest, so your actual annual earnings are UGX 127,500.

Where to Track Bond Rates and Invest

You can follow bond rates on:

Bank of Uganda Auction Results
Invest in Bonds on Level Africa (view current bonds, expected returns, and place instant orders)

Final Thoughts and Next Steps

Understanding bond rates helps you choose the best time and product to invest in. The higher the rate — and the lower the inflation — the more your money grows.

You can start with as little as UGX 100,000. Check the latest bond rates and place your first investment today.

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Frequently Asked Questions About Treasury Bonds in Uganda

What are government bonds?

Government bonds are a way to lend money to the Government of Uganda. In return, the government pays you a fixed interest rate every 6 months and gives back your full investment at the end of the bond’s term.

How do treasury bonds work in Uganda?

You buy a bond (e.g. 3, 5, or 10 years), the government pays you interest every 6 months, and you get your full capital back when the bond matures. All bonds are issued and regulated by the Bank of Uganda.

What is the minimum amount to invest in government bonds?

You can start investing with UGX 100,000 using a non-competitive bid. No broker is needed when using platforms like Level Africa.

How can I buy government bonds in Uganda?

You need a Central Depository System (CDS) account or a digital investment platform like Level Africa.
Steps:

Create an account on Level Africa
Upload your National ID or Passport (KYC)
Go to “Treasury Bonds” under Products
Choose a bond that matches your investment goals
Deposit funds into your wallet
Place your order — instantly if marked “Available”
Track your bond and earnings from your dashboard

What are the current treasury bond interest rates in Uganda (2025)?

Rates vary by bond type and auction results. For example:

2-Year bond: around 15.75%
10-Year bond: around 16.25%
20-Year bond: up to 18.50%
All rates are set during each auction by the Bank of Uganda.

Are treasury bonds safe in 2025?

Yes. Treasury bonds are backed by the Government of Uganda and are considered among the safest investments, especially for long-term or retirement goals.

Do government bonds pay interest?

Yes. Interest is called a coupon and is paid out every 6 months. You receive it directly to your wallet or bank account.

Can I sell a bond before it matures?

Yes, bonds are transferable and can be rediscounted if you need to exit early, although the resale price depends on current market rates.

How do interest rates affect bonds?

If new bond rates go up, the value of existing bonds on the market may go down (and vice versa). However, if you hold your bond until maturity, you still get your full investment and all promised interest.

What’s the difference between treasury bonds and treasury bills?

Treasury bonds: Long-term (2–25 years), pay interest every 6 months
Treasury bills: Short-term (91–364 days), sold at a discount and paid back in full at maturity

Can individuals buy Bank of Uganda treasury bonds?

Yes. Both individuals and institutions can invest. Many Ugandans now use Level Africa to access bonds directly with no paperwork.

How often are treasury bonds auctioned in Uganda?

Typically, every 28 days. The auction calendar is published annually by the Bank of Uganda, and Level Africa notifies you ahead of each sale.