Treasury Bills vs Treasury Bonds vs Infrastructure Bonds in Kenya 2026

Updated 21 October 2026

Quick answer: Treasury bills are short loans to the government (91, 182 or 364 days) that paid about 8.75% to 9.04% in October 2026, with a KSh 100,000 minimum and 15% withholding tax. Treasury bonds lock your money for years (the October 2026 auctions offered bonds with 7.8 to 29.6 years left to run) and pay a fixed coupon every six months, with accepted yields of about 12.7% to 14.2% and 10% withholding tax. Infrastructure bonds work like Treasury bonds but are tax-free; the August 2026 auction accepted yields of about 12.2% to 13.1%. Bonds start from KSh 50,000.

All rates here come from Central Bank of Kenya (CBK) auction results and prospectuses: the Treasury bill rates CBK listed for the auction of 22 October 2026, the bond auctions dated 5 October and 19 October 2026, and the infrastructure bond auction dated 17 August 2026. Last verified 19 October 2026.

In this guide

1. T-Bills vs T-Bonds vs IFBs at a Glance
2. Treasury Bills: Short Term and Simple
3. Treasury Bonds: Higher Fixed Income for Longer
4. Infrastructure Bonds: The Tax-Free Option
5. Which One Should You Choose?
6. How to Buy Any of the Three
7. Frequently Asked Questions

T-Bills vs T-Bonds vs IFBs at a Glance

Feature	Treasury bill	Treasury bond (FXD)	Infrastructure bond (IFB)
Term	91, 182 or 364 days	From about 1 to 30 years	Long term; recent issues run 16 to 21 years
How you earn	Bought at a discount, paid full face value at maturity	Fixed coupon paid every six months, face value back at maturity	Fixed coupon every six months; principal often paid back in instalments
Recent rate	8.75% (91-day), 8.86% (182-day), 9.0383% (364-day)	12.73% to 14.18% accepted, October 2026	12.20% to 13.05% accepted, August 2026
Withholding tax	15%	10% on the October 2026 bonds	None (tax-exempt)
Minimum	KSh 100,000	KSh 50,000 (non-competitive bid)	KSh 50,000 (non-competitive bid)
Maximum non-competitive bid	See the weekly CBK prospectus	KSh 50 million	KSh 50 million
Auction frequency	Weekly	Monthly, with reopenings, switches and tap sales	Occasional, when the Treasury issues one
Selling early	Possible but not simple	Secondary market in multiples of KSh 50,000	Secondary market
Where to buy	CBK DhowCSD, banks, brokers	CBK DhowCSD, banks, brokers	CBK DhowCSD, banks, brokers

Treasury Bills: Short Term and Simple

A T-bill is the easiest government security to understand. You bid at the weekly auction, pay less than the face value, and receive the full face value when the bill matures. The difference is your interest. For the auction of 22 October 2026, CBK listed the previous average rates as 8.75% for the 91-day bill, 8.86% for the 182-day bill and 9.0383% for the 364-day bill.

On KSh 100,000 in a 364-day bill at 9.0383%, a simple estimate of the interest is about KSh 9,014 before tax and about KSh 7,662 after the 15% withholding tax. Because bills are sold at a discount, the real figures differ slightly. Our guide on how to buy Treasury bills walks through bidding on DhowCSD, and our comparison of money market funds vs Treasury bills shows how bills stack up against funds you can withdraw from at any time.

Treasury Bonds: Higher Fixed Income for Longer

Fixed coupon Treasury bonds (their issue numbers start with FXD) pay interest twice a year at a rate fixed for the bond’s whole life. CBK auctions them monthly and often reopens older bonds, which is why a “30-year” bond may have 14 years left to run. The yield you get depends on the price you bid, not only on the coupon.

October 2026 bond auction results

Bond	Years to maturity	Coupon	Weighted average accepted yield	Price per KSh 100	Withholding tax
FXD3/2019/015 (auction dated 5 Oct)	7.8	12.3400%	12.7338%	100.6538	10%
FXD1/2019/020 (auction dated 5 Oct)	12.5	12.8730%	13.6016%	95.6773	10%
SDB1/2011/030 (auction dated 19 Oct)	14.4	12.0000%	13.6507%	91.9966	10%
FXD1/2026/030 (auction dated 19 Oct)	29.6	12.5000%	14.1830%	88.3420	10%

The 19 October auction offered KSh 50 billion and received bids of KSh 83.8 billion. CBK accepted KSh 53.0 billion. The 5 October auction also offered KSh 50 billion, drew KSh 80.6 billion in bids and accepted KSh 57.5 billion.

What KSh 100,000 earns in a bond

Take FXD1/2026/030 with its 12.5% coupon. On KSh 100,000 face value, the coupon is KSh 12,500 a year, paid as two payments of KSh 6,250. After 10% withholding tax you keep about KSh 11,250 a year. At the October auction’s average price of 88.3420, that KSh 100,000 of face value cost about KSh 88,342, which is why the yield (14.18%) is higher than the coupon. Try different amounts in our Treasury bond calculator.

Infrastructure Bonds: The Tax-Free Option

Infrastructure bonds (IFB) raise money for named public projects. CBK notes that they usually attract strong demand because their returns are exempt from tax. In the August 2026 prospectus, the withholding tax line for all three IFBs reads “N/A”.

Bond	Years to maturity	Coupon	Weighted average accepted yield	Price per KSh 100
IFB1/2019/016	9.3	11.7500%	12.1960%	101.8778
IFB1/2021/018	12.7	12.6670%	12.6877%	104.4961
IFB1/2021/021	16.2	12.7370%	13.0520%	103.9946

That August auction offered KSh 150 billion and received bids of about KSh 460 billion, of which CBK accepted about KSh 312 billion. Investors were willing to pay more than face value (prices above 100) because the coupons are tax-free.

The amortisation catch

Many IFBs do not pay all your principal back at the end. The August 2026 bonds have amortisation dates, when half of the outstanding principal is repaid, before the final redemption. Your coupon income falls after each repayment because you are earning on a smaller amount. Read the amortisation dates in the prospectus before you buy, and model the cash flows in our infrastructure bond calculator.

Tax comparison on KSh 100,000

Security	Annual gross interest	Tax	Annual net interest
FXD3/2019/015 at 12.34% coupon	KSh 12,340	10%	KSh 11,106
FXD1/2026/030 at 12.5% coupon	KSh 12,500	10%	KSh 11,250
IFB1/2021/021 at 12.737% coupon	KSh 12,737	0%	KSh 12,737

These use coupon income on face value only. Your actual return also depends on the price you paid.

Which One Should You Choose?

• Choose T-bills if you need the money back within a year, for school fees, a land deposit or an emergency reserve you do not want in a bank account.
• Choose Treasury bonds if you want steady income every six months and can leave the money for years. Match the remaining term to your goal.
• Choose infrastructure bonds when one is on offer and you want the highest after-tax income, and you are comfortable with principal coming back in instalments.
• Choose neither yet if you have less than KSh 50,000. Start in one of the regulated money market funds and move up once you reach the minimum, or look at the M-Akiba retail bond in our M-Akiba bond calculator.

How to Buy Any of the Three

1. Open a CBK DhowCSD account online, linked to a Kenyan bank account.
2. Check the prospectus for the bills or bonds on offer and note the bid closing time.
3. Place a non-competitive bid (you accept the average rate) or a competitive bid (you name your rate; minimum KSh 2 million per CSD account per tenor for bonds).
4. Check your result on DhowCSD after the auction, get the payment key and pay by 2pm on the settlement date, usually the Monday after the auction.

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Frequently Asked Questions

Which is better, a Treasury bill or a Treasury bond?

Neither is better for everyone. Bills suit money you need within a year; bonds pay more (about 12.7% to 14.2% accepted in October 2026 against about 8.75% to 9.04% for bills) but lock your money up for years.

What is the minimum for a Treasury bond in Kenya?

KSh 50,000 for a non-competitive bid, up to a maximum of KSh 50 million. Competitive bids start at KSh 2 million.

Are infrastructure bonds tax-free in Kenya?

Yes. CBK describes them as tax-exempt, and the August 2026 IFB prospectus shows no withholding tax.

What is the withholding tax on Treasury bonds?

The October 2026 bond prospectuses show 10% for each bond on offer. Treasury bills carry 15%.

How often are Treasury bonds auctioned?

CBK auctions Treasury bonds every month and often adds reopenings, switch auctions and tap sales. Treasury bills are auctioned every week.

Can I sell a bond before it matures?

Yes, on the secondary market through a bank or stockbroker, in multiples of KSh 50,000. The price depends on market yields at the time, so you may get more or less than you paid.