Treasury Bonds in Uganda Explained: Returns, Safety, Access

What Is a Treasury Bond?

A treasury bond is a loan you give to the Government of Uganda. The government promises to pay you back after a certain period (like 2, 5, or 10 years), with interest.

Think of it like this: you give the government UGX 1,000,000 now, and they agree to give you UGX 158,000 every year for 10 years, plus your UGX 1,000,000 back at the end.

These bonds are issued and managed by the Bank of Uganda and are one of the most trusted investment options available in the country.

Why Do People Invest in Treasury Bonds?

Many people in Uganda are turning to treasury bonds because:

The returns are higher than what most savings accounts offer
The investment is safe and predictable
It is a smart way to save for big goals such as school fees, land purchase, or retirement

For example: Let’s say you’re saving up UGX 5 million for your daughter’s university fees in 3 years. Putting it in a 3-year treasury bond means you’ll earn interest each year and have a bigger amount by the time you need it.

How Much Can You Earn from Treasury Bonds?

Here is a general idea of what treasury bonds in Uganda pay:

2-Year Bond – around 14.75 percent return per year
5-Year Bond – around 16.25 percent return per year
10-Year Bond – around 17.00 percent return per year

Let’s say you invest UGX 1,000,000 in a 5-year bond with 16.25 percent interest:

You would earn about UGX 162,500 each year
Interest is paid twice a year (UGX 81,250 every 6 months)
After 5 years, you get your full UGX 1,000,000 back

Understanding Coupon Rate and Yield (Real-Life Example) Let’s break this down with an example, like we did in the earlier guide:

Suppose you buy a bond with a coupon rate of 14 percent. That means you will earn UGX 140,000 every year if the bond’s face value is UGX 1,000,000.
Now imagine you did not pay UGX 1,000,000 — you got it at a discount, say UGX 950,000. You will still earn UGX 140,000 per year. Because you paid less but earn the same interest, your actual return (yield) is higher than 14 percent.

So:

Coupon Rate = fixed annual interest based on face value
Yield = what you really earn, based on how much you paid

This matters when comparing different bonds or deciding when to buy.

Are Treasury Bonds Safe?

Yes. Treasury bonds are considered very low risk.

Why?

They are backed by the Government of Uganda
You know how much you will earn from day one
Your capital is returned at maturity

The only thing to consider is inflation. If prices rise faster than your bond return, your money might lose some value. Also, bonds are best held to maturity. Selling early is possible but may involve a price change.

How to Access Treasury Bonds in Uganda

Getting started is simpler than you think. Here is what you need:

Be 18 or older
Have a valid ID (National ID or passport)
Start with as little as UGX 100,000

The easiest way to invest is through a licensed platform like Level Africa:

Create a free account on Level Africa
Fund it via Mobile Money or bank transfer
Browse bonds under “Products > Treasury Bonds”
Choose a bond that fits your goal
If the bond is marked “Available,” you can buy it instantly. Otherwise, your order will be placed in the next auction
Place your order and start earning

Common Questions First-Time Investors Ask

Can I lose my money?
Very unlikely. These are government-backed investments.

Can I sell my bond before it ends?
Yes, but it depends on finding a buyer. It is easier to hold until the end.

Are my returns taxed?
Yes. A 15% withholding tax is taken off your interest before you receive it.

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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.