I am a Ugandan who is interested in investing in treasury bills and bonds or government securities. I have the following concerns about BoU bonds and I hope you will help me answer these seven questions.
Do I need to own an account with Bank of Uganda before investing in treasury bills and bonds? Can use my account in other banks (how do treasury bills work in Uganda)?
- No, you don’t have to own an account with Bank of Uganda. All you need is to open up a Central Depository System (CSD) account with any commercial bank of your choice
After application, am I allowed to keep depositing in the account or the principle just remains?
- Yes after opening an account you can keep depositing on your account in volumes of UGX. 100,000. This will enable you accumulate enough money you may wish to invest in securities.
What is the threshold amount to start investment in Treasury Bills?
- You need a Minimum of 100,000 Ugx to invest in our securities both T-bills and TBonds.
Are the rates the same in all the banks or they vary depending from bank to bank.
- The rates in the primary market are determined by the Auction that is run by Bank of Uganda. Commercial banks will there after offer to clients the results in the Auction.
- However, if you are to invest in the secondary market securities, the commercial banks offer competitive daily market rates that are close or similar to each other.
If I invest, and l continue depositing in my account, does all the money in my account go to the Treasury Bill?
- No, not all the money you deposit in your account goes to the treasury bill. You are the one who authorizes your bank on how much you would love to invest by signing a bid application form that entails the amount of money to invest.
Is there any specific amount to invest monthly or it is just open?
- For the Primary Market, Investors are only allowed to invest when BoU issues an invitation to tender through their website or the press (New Vision). This press release invites potential investors to participate in the Auctions specifying the dates the Auction will be run.
Bank of Uganda auction calendar
- T-bills are offered twice a month while a bond is offered after 28 days that’s once a month.
- However you have an option of investing in the secondary market trades on a daily basis from Monday to Friday working days only.
How do I apply for investment in treasury bills and bonds?
- Apply through any bank of your choice (for example treasury bills in Stanbic bank Uganda or Centenary bank treasury bills). Start by opening up a CSD account, then wait until BoU invites applicants to invest in securities through the press. The advert usually runs on a Thursday or you can check on the BoU website under financial markets. You ask your banker when an Auction for either a Treasury bill or a Treasury bond is run.
- You then fill in a bid application form specifying how much you would love to invest.
- Bids ranging from Ugx 100,000 – 200,0000,000 are categorized as Noncompetitive bids, with this range your bid will be accepted and your account will be debited.
- Amounts from Ugx 200,000,0000 and above are categorized as competitive bids where you need to quote a rate at which you are willing and ready to lend your money to the government at that specified rate. Your bankers will always guide you at the prevailing market rates.
- Please note with a competitive bid its not a guarantee that your bid will be successful.
I hope I have been of help to you and for more inquiries kindly visit the Bank of Uganda dealer Window at counter 14 Banking hall Bank of Uganda. You can access the hall by using the gate opposite Cairo bank.