A KSh 100,000 364-day Treasury bill at 9.04% costs KSh 90,985 and returns KSh 7,663 after 15% withholding tax.
How Treasury bill discount pricing works
A Treasury bill pays no coupon. You buy it below its face value and the government repays the full face value at maturity. The gap between the two is your return, called the discount.
The discount is subject to 15% withholding tax, deducted when you buy through CBK or your bank, so the return you keep is 85% of the headline discount. That is the same tax as on fixed deposits and money market funds, so T-bills compare fairly with both. Infrastructure bonds are the main tax-free government option.
What are the current Treasury Bill rates in Kenya?
At the CBK auction for bills issue-dated 5 October 2026, the average rates were 8.77% for 91 days, 8.89% for 182 days and 9.04% for 364 days. Rates change every week; see our Treasury bill rates page for the history.
Is Treasury Bill interest taxed?
Yes. Interest (the discount) on Treasury bills is subject to 15% withholding tax, which is a final tax for individuals. Only infrastructure bonds are tax-free.
How does the discount pricing work?
You don't pay the face value upfront. Instead, you pay a discounted purchase price, and the government repays the full face value at maturity. The difference between what you paid and what you receive is your return.
What's the minimum investment for a Treasury Bill?
The minimum face value for a non-competitive bid, which is generally recommended for retail investors since it guarantees allocation at the market rate, is KSh 50,000.