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Introduction to Government Bonds Kenya

Updated: Mar 29, 2021

Government Bonds Kenya

What are government securities? 🤔

Government security is a bond issued by a government authority with a promise of repayment upon maturity.

Government securities are often dubbed the” risk-free investment” – let's find out if it's true.

Yes, tell me more 👂🏽

Government bonds are considered safe since the government will always pay out the investors. It is highly unlikely that the government will default on a bond.

📅Period: You can buy a bond for a period ranging from 3 months to 25 years.

🏦Access to funds: Anytime you can always sell your bonds when you need your money through your broker.

💹 Returns: The returns range from 7% (for the shorter period) to 13% (for longer periods).

💸 Tax: The income attracts withholding tax of between 10% and 15%, only on the capital gained.

Great, I’m keen.😁

How do I buy some?

You can buy the bonds either through:

  • The primary auction (from Central Bank of Kenya) The Primary auction is held once every month while Treasury-Bills (T-Bills) auctions (91, 182, 364 days) are held every week.

  • The secondary market (from investors).

☝🏽 Note: To trade in Government of Kenya (GOK) securities, an investor would need to open a Central Depository & Settlement Corporation Limited (CDSC) account with the Central Bank of Kenya. Check out here on how to open an account:

For the secondary market trades, an investor can contact any of the authorized brokers/investment banks. Check out the list here.


Let’s say you invest KES 10 000 in a 5-year government bond with a 10% annual return

you will receive the following fixed income:

Y1-first half: 500 ((10 000*10%)/2) - interest

Y1-second half: 500

Y2-first half: 500

Y2-second half: 500

Y3-first half: 500

Y3-second half: 500

Y4-first half: 500

Y4-second half: 500

Y5-first half: 500

Y5-second half: 500 + 10 000 (initial investment)

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Interested in corporate bonds? Check it out.

Disclaimer: The views expressed in this publication are those of the writers where particulars are not warranted. This publication is meant for general information only and is not a warranty, representation, advice or solicitation of any nature. Readers are advised in all circumstances to seek the advice of a registered investment advisor. Full Disclaimer


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