How to Buy a Bond at a Treasury Auction
Part 7/15: A Beginner’s Guide to Investing in Treasury Bonds & Bills
Buying a treasury bond at an auction is one of the best ways to invest in government securities at the best price. Here’s a simple step-by-step guide to get started.
Step 1: Check the Auction Schedule
The Bank of Uganda (BoU) announces treasury bond auctions every month. You can check the schedule on BoU’s website or through your bank.
Step 2: Decide How Much to Invest
The minimum investment is usually UGX 100,000.
Bonds are sold in multiples of UGX 100,000, so you can invest UGX 100K, UGX 200K, UGX 1M, etc.
Step 3: Choose Your Bank and Fill in a Bid Form
Since individuals can’t buy directly from the Bank of Uganda, you must go through a primary dealer bank (e.g., Stanbic, Absa, Centenary).
Ask your bank for a Treasury Bond Bid Form.
Choose between a competitive bid (you set the interest rate) or non-competitive bid (you accept whatever interest rate the auction sets).
Step 4: Deposit Your Funds
Once your bid is accepted, you’ll need to deposit the full amount into your bank account before settlement (usually in 2-3 days). The bond is then credited to your CDS account.
And that’s it! You now officially own a government bond. But what if you want to buy a bond outside the auction? Stay tuned for the next article on the secondary or Over the Counter (OTC) market!
This is part of the series A Beginner’s Guide to Investing in Treasury Bills and Bonds.
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