Treasury bills (T-bills) are short-term government debt instruments issued by the Bank of Zambia on behalf of the government. They are one of the simplest ways to earn a guaranteed return on your money over periods of 91 to 364 days.
Use our Treasury Bills calculator to estimate your returns at any face value and yield rate.
How Treasury bills work
Short-term: Available in four tenors - 91, 182, 273, or 364 days.
Bought at a discount: You pay less than the face value. The difference between your cost and the face value is your return.
No coupon payments: Unlike bonds, there are no periodic interest payments during the term.
Lump sum at maturity: At the end of the term, the government pays you the full face value. Your profit is the discount amount, minus tax and fees.
The pricing formula
P = (1 / (1 + (n/365 x i))) x FWhere:
P = price (what you pay)
n = number of days to maturity
i = interest rate (yield, as a decimal)
F = face value
Worked example from BoZ: 182-day T-bill, face value K100, yield 10.5%:
P = (1 / (1 + (182/365 x 0.105))) x K100 = K95.03Your gross profit: K100 - K95.03 = K4.97 per K100 face value.
Available tenors
Tenor | Indicative Yield | Cost per K100 | Discount per K100 |
|---|---|---|---|
91 days | 10.85% | K97.37 | K2.63 |
182 days | 11.9% | K94.40 | K5.60 |
273 days | 12.3% | K91.58 | K8.42 |
364 days | 13.0% | K88.53 | K11.47 |
How to buy Treasury bills step by step
Open a CSD account - Register at the Bank of Zambia via investorportal.boz.zm.
Have a Kwacha bank account - Any commercial bank in Zambia. This is where your cost is debited and maturity proceeds credited.
Watch for auction announcements - T-bill auctions are held every two weeks (fortnightly). Dates are published on the BoZ website and in newspapers.
Submit your bid - Non-competitive (K1,000 to K499,999 face value) or competitive (K500,000 and above). Non-competitive bidders accept the auction rate.
Settlement - If successful, your bank is debited the cost amount (not the face value) and the T-bill is credited to your CSD account.
Maturity - At the end of the term, the full face value minus deductions is paid to your bank account.
With non-competitive bidding, you do not need to specify an interest rate. You accept whatever rate the competitive auction determines. This is the simplest way for individual investors to participate.
What you earn - worked example
K100,000 face value, 364-day T-bill at 13%:
Cost (what you pay): K100,000 / (1 + (364/365 x 0.13)) = K88,525.70
Gross discount (profit): K11,474.30
Withholding tax (20%): K2,294.86
Handling fee (1%): K114.74
Net profit: K9,064.70
You pay K88,525.70 upfront. At maturity, you receive K100,000 minus the deductions on the discount, giving you a net return of K9,064.70 on your investment.
Deductions
20% withholding tax on the discount (profit) amount - not on the face value.
1% handling fee at maturity - also calculated on the discount amount.
Both are deducted before you receive your proceeds at maturity.
Can you exit early?
You can rediscount at BoZ if your T-bill has a face value of at least K50,000.
You can sell to any willing buyer on the secondary market.
Contact your commercial bank for assistance with either option.
Considering longer-term options? Read our guide on How to Invest in Government Bonds in Zambia.
Frequently asked questions
How often are Treasury bill auctions held in Zambia?
T-bill auctions are conducted every two weeks (fortnightly). Dates are published on the BoZ website and in newspapers in the week of the auction.
Can I invest less than K1,000 in Treasury bills?
No. The minimum face value for non-competitive purchases is K1,000. For competitive purchases, the minimum is K500,000. The maximum face value for non-competitive bids is K499,999.
What is the difference between competitive and non-competitive bidding?
In competitive bidding, you specify both the face value and the interest rate you want. BoZ ranks bids from lowest to highest rate and allocates from the bottom up. In non-competitive bidding, you only specify the face value and accept whatever rate the competitive auction determines.
How long does it take to receive my T-bill proceeds at maturity?
Proceeds are paid through your registered commercial bank on the maturity date. Your bank credits your account on the same day or the next business day.