Competitive vs Non-Competitive Bids: Which Should You Use?
Two ways to bid at a Government securities auction, and the trade-off between price and certainty.
Published 12 Oct 2026 · 2 min read
At every Bank of Tanzania auction of Treasury bonds and bills, the amount on offer is split between two kinds of bids. Knowing the difference helps you decide how to bid.
Competitive bids: you name your price
With a competitive bid you state the price (or yield) you are willing to accept and the amount. After the deadline, bids are ranked from the best price for the Government downwards and accepted until the amount the Government wants is filled. The lowest accepted price is published as part of the result.
Advantage: you control the price. You will not pay more than you bid.
Risk: if your price is too low (your yield too high) compared with other bids, your bid may not be accepted at all.
Non-competitive bids: you accept the average
With a non-competitive bid you only state the amount. If accepted, you pay the weighted average price of the successful competitive bids. You take the market's price instead of choosing one.
Advantage: simpler, and you do not need to judge the market's price.
Risk: you do not control the price, and the amount set aside for non-competitive bids is limited.
How much is set aside for each?
Each notice splits the amount offered. Two recent examples from BoT notices:
Bond No. 722 (auction 15 Oct 2026): TZS 414.19 billion offered, of which TZS 289.93 billion competitive and TZS 124.26 billion non-competitive (notice).
Treasury bills auction No. 1208 (7 Oct 2026): TZS 389.56 billion offered, of which TZS 388.70 billion competitive and TZS 0.86 billion non-competitive (notice).
The share changes from auction to auction, so always read the notice.
Which one suits you?
There is no single right answer; it depends on what matters more to you.
If certainty of the price matters more, a competitive bid lets you set your limit.
If simplicity matters more and you are comfortable with the average price, a non-competitive bid avoids guessing.
To get a feel for recent prices and yields, look at previous auction results for the same tenor before you bid.
Your CDP can tell you which bid types they accept and how to submit each.
This article is for education only and is not investment advice. Examples marked as illustrations are not current rates. Confirm terms in the official Bank of Tanzania notice and speak to a licensed adviser before you invest.