How to Calculate Returns on Treasury Bills in Uganda

Treasury bills (T-bills) are one of the most predictable investments in Uganda. But many first-time investors wonder: how do you know how much you’ll earn from a treasury bill? The good news is that calculating returns is simple once you understand how they work.
Treasury Bills Work on a Discount Basis
Unlike bonds (which pay interest every six months), treasury bills are sold at a discount and redeemed at face value.
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You buy the bill at less than its face value.
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At maturity, you receive the full face value.
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The difference is your profit (return).
Formula:
Step 1: Identify the Face Value
The face value is the amount you will receive at maturity. In Uganda, this is usually in multiples of UGX 100,000.
Example: You apply for a UGX 1,000,000 treasury bill.
Step 2: Apply the Auction Discount Rate
The Bank of Uganda auction determines the discount rate (cut-off yield).
Example: The 364-day auction cut-off yield is 15%.
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Purchase Price = Face Value ÷ (1 + (Yield × Days/365))
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Purchase Price = 1,000,000 ÷ (1 + (0.15 × 364/365))
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Purchase Price ≈ UGX 869,565
Step 3: Calculate Your Profit
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Face Value: UGX 1,000,000
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Purchase Price: UGX 869,565
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Profit = UGX 130,435
Step 4: Deduct Withholding Tax
All treasury bill returns are subject to 20% withholding tax.
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Tax = 20% × 130,435 = UGX 26,087
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Net Profit = UGX 104,348
Step 5: Work Out Your Effective Annual Yield
Even if you invest in a shorter tenor (91 or 182 days), you can calculate the effective annual yield by annualizing the return.
Example: 182-day bill at 12% yield
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Face Value = 1,000,000
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Purchase Price ≈ UGX 941,176
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Profit = UGX 58,824 (before tax)
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Effective Yield ≈ 12% per year
Quick Reference – Typical Treasury Bill Yields
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91-Day Bill: 10–12% annualized
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182-Day Bill: 12–14% annualized
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364-Day Bill: 14–16% annualized
Want to see updated rates and auction results?
Final Thoughts
Calculating treasury bill returns in Uganda comes down to understanding the discount formula and factoring in withholding tax. Once you know the face value, the auction yield, and the tenor, you can work out exactly what you’ll earn.
Treasury bills remain one of the safest and most transparent investments for Ugandans looking for short-term returns.
FAQs
1. How much do I need to invest in treasury bills in Uganda?
The minimum is UGX 100,000 for non-competitive bids.
2. Do I get monthly interest on treasury bills?
No. You buy at a discount and receive the face value at maturity.
3. How is withholding tax applied on treasury bills?
20% of your profit is deducted automatically.
4. How can I quickly calculate treasury bill returns?
Use the formula or a simple calculator: Return = Face Value – Purchase Price.
5. Which treasury bill has the highest return?
The 364-day bill usually offers the highest effective yield.