What is a Treasury Bill?
Part 3/15: A Beginner’s Guide to Investing in Treasury Bonds & Bills
A Treasury Bill (T-Bill) is a short-term loan you give to the government in exchange for a return. It’s one of the safest ways to invest your money because the government guarantees it.
In Uganda, treasury bills come in three options:
91-day (3 months)
182-day (6 months)
273-day (9 months) - very rare!
364-day (1 year)
How Do Treasury Bills Work?
When you buy a treasury bill, you don’t get paid interest like a bank deposit. Instead, you buy it at a discount and get the full amount when it matures. For example, if you buy a UGX 1 million T-Bill for UGX 900,000, you’ll receive UGX 1 million at the end of the term, making UGX 100,000 as your profit.
Who Should Invest in Treasury Bills?
Individuals looking for safe short-term investments
Investment clubs pooling money for short-term gains
Businesses needing a low-risk place to park excess cash
T-bills are a great way to earn a return on your money without locking it up for too long. Want to know how they differ from treasury bonds? See the next article in the series!
This is part of the series A Beginner’s Guide to Investing in Treasury Bills and Bonds.
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