Your Investment Journey: From Reading to Owning a Government Security

Reading about Treasury bonds and bills is the first step. Owning one takes seven more. This page is the map: each step links to a short guide with the official rules, real numbers and what to bring.

Before you start: bill or bond?

Both are loans to the Government of Tanzania, sold at Bank of Tanzania auctions. The right one depends on when you need the money back.

• Treasury bills run 35, 91, 182 or 364 days. You pay less than the face value and receive the full face value at maturity. Minimum bid: TZS 500,000, in steps of TZS 10,000. Interest is subject to 10% withholding tax (BoT notice for bills auction No. 1208).

• Treasury bonds run 2 to 25 years and pay a fixed coupon every six months. Minimum bid: TZS 1,000,000, in steps of TZS 100,000. Interest on bonds of 5 years and longer is exempt from withholding tax; 2-year bonds are taxed (BoT bond guidelines, 2022). You can sell a bond before maturity on the Dar es Salaam Stock Exchange.

• Ask yourself: Will I need this money within a year? Do I want income twice a year? Can I wait until maturity, or might I need to sell?

Compare today's rates on Rates & economy and the latest results on auction results.

The seven steps

Step 1: Check you can take part

Each auction notice says who is eligible. Recent notices range from "all investors, including foreign nationals" to residents of the East African Community and SADC plus Tanzanians in the diaspora. Read: Who can invest and the documents you need.

Step 2: Open a CDS account through a CDP

Government securities are held electronically in the Bank of Tanzania's Central Depository System (CDS). You open your account through a Central Depository Participant (CDP): a licensed bank or broker. Read: Opening your CDS account.

Step 3: Pick an auction and read its notice

The auction calendar lists what is coming. The notice for each auction sets the amount, minimum bid, settlement date, coupon dates, tax and eligibility. The notice is the rulebook.

Step 4: Place your bid before 11:00 a.m.

Choose competitive (you name the price) or non-competitive (you take the average price), fill the tender form and submit it through your CDP before the deadline. Read: How to place a bid.

Step 5: Pay the next working day

If your bid wins, you pay through your bank the day after the auction (T+1), using the bid code from your CDP. Read: How much you pay and receive.

Step 6: Know every cost

Tax, accrued interest, bank charges and your CDP's fees. Read: Fees, taxes and other costs.

Step 7: Hold, receive, or sell

Coupons and the final repayment go straight to your bank account. You can also sell a bond on the DSE or use it as collateral for a loan. Read: After the auction.

Your checklist

• National ID, passport, voter ID or driving licence

• TIN (Taxpayer Identification Number)

• A bank account in the same name as your CDS account

• Passport-size photos for the signature card

• A CDS account number from your CDP

• The auction notice, read in full

• Money ready in your bank account for the settlement date

Plan your numbers

Use the bond calculator to see the coupons and repayment for any amount, and the Start investing guide to walk through today's terms.

This article is for education only and is not investment advice. Rules change: the Bank of Tanzania notice for each auction is what applies. Speak to a licensed adviser before you invest.