These are short term debt instruments issued the government through the central bank.
Features of Treasury Bills
- They are issued at a discount.
- They are used as a measure of the risk free rate of return.
- They can be used mob-up excess liquidity in the economy and control initiation.
- They enable the government to borrow from the public
- The minimum investment in treasury bills is 100,000 shillings.
Difference between Treasury Bills and Treasury Bonds
|Treasury Bills||Treasury Bonds|
|1. Minimum investment is shs. 100,000
2. Short term debt instruments
3. Are issued at a discount.
4. They are not transferable.
5. Interest on T. Bills is lower than on T. bonds
|1. Minimum investment is shs. 50,000.
2. Long term debt instruments
3. Are issued at par or face value.
4. They are transferable
5. Interest on T. Bonds is a premium higher than T. bills