Guide to investing in treasury bills in Ghana

Treasury bills (T-bills) are among the most popular investment instruments in the country. But despite the high demand for them, a lot of people do not have a good idea of what they actually are. In this post I will explain what T-bills are, how the return on them is determined and the advantages and disadvantages of having them in your portfolio.

What are T-bills? 

Treasury bills are short-term loans that the government takes to finance various operations. In Ghana, the maturity of T-bills are 91-days and 182-days with each of them offering a different return. Because T-bills are guaranteed by government, it is considered a risk-free investment and therefore it is usually used as a benchmark for determining the value of any investment. If an investment offers you returns lower than a T-bill, then you probably would not want to invest in it.

How are T-bill rates determined?

The government issues T-bills through auctions. The auctions are not open to the general public. They are only available to primary dealers.  These are financial institutions which are permitted by the Bank of Ghana (BoG) and licensed by the Securities and Exchange Commission (SEC) to buy government securities issued by the BoG. Click here for the list of primary dealers in Ghana.

The government issues the T-bills worth a certain value (known as the face value) to be redeemed within 91 or 182 days (the maturity period) and the dealers bid to buy the T-bills at a price lower than that face value. This is called buying at a discount. The difference between the price which the dealers pay for the T-bill and the face value of the T-bill is the interest. For example, if a dealer buys a T-Bill with a face value of GH¢1,000 at GH¢900, then the difference of GH¢100 is the interest earned on the investment. At the end of each auction, the average of the bids determines the T-bill rate which is published on the BoG website.

How do individual investors buy T-bills?

If you could not get your head around the preceding section, do not worry. It is irrelevant for individual investors. Most financial institutions offer T-bills to the general public with minimum purchases of about GH¢100 or GH¢200. You can choose to purchase it for 91 days or 182 days, with the 182-day version having a higher interest rate because of the longer maturity period. You will have the option to have your principal and interest deposited in your account at maturity; have the interest deposited in your account and the principal rolled over (re-invested in T-bills); or have the interest added to your principal and the total rolled over. Many financial institutions offer you the opportunity to redeem your investment before maturity. Be sure to ask about this before buying, in case you may need to withdraw money for an emergency.

Advantages of T-bills

  • No risk of losing your investment (as long as the government does not collapse).
  • It is liquid i.e. it is usually easy to redeem your investment whenever you need it.
  • No fees. You are usually not charged investment fees when you buy T-bills.
  • No taxes. Returns on your T-bills are not taxed in Ghana.
  • Easy to buy. Your bank probably offers it.
  • Low volatility. Treasury bill rates rise and fall less wildly than other investments e.g. stocks.
  • You feel like you are contributing to help the country develop. (Debatable lol)

Disadvantages of T-bills

  • Relatively low returns. It is risk-free so do not expect to earn exceptional returns on this. This is not always true but it is usually true over long periods compared to other assets.
  • Returns are not fixed. Since the rates are determined by auctions, you could have your T-bill rolled over at a rate lower or higher than your initial purchase.
  • It draws investment from the stock market. One reason why the Ghana Stock Exchange (GSE) sees low volumes is because T-bills are usually the first option for many investors.
  • It makes borrowing costs high for businesses. T-bill rates in Ghana are usually high and this draws banks to invest in them to the detriment of businesses looking for credit.
  • Everybody buys them. If you buy T-bills then you do not stand out as investor. I have written before that one should not care that an investment isn’t sophisticated. But it apparently bothers some people that they are doing something everyone else is.

Thanks for reading. If you enjoyed this kindly take the time to share. If you have any questions, you can ask me in the comments.

196 comments

  1. Great stuff
    Before my investment reaches maturity, do I need to inform the bank few days earlier in order to withdraw my investment plan???

    • Yes, if you have requested a rollover. You usually have to inform your bank about a week to maturity that you no longer wish to re-invest, so the amount should be credited to your account. Nevertheless, even if it is re-invested, you can still withdraw. The only thing will be that you will lose some of the interest on the T-bill.

  2. Please, which of these will you suggest for me to invest; Fixed deposit or Treasury bills. Which of them is likely to fetch me more interest?

  3. I’m from UK and I have a bank account in Ghana, once I receive the funds from my T bill investment, how much tax will I need to pay to send back to UK?

    • I’m not familiar with the UK tax code but my guess is it would be added to your income for the year and taxed at the marginal tax rate. Do kindly get in touch with a UK finance adviser

  4. Please I’m a student who wants to buy T bills, I’m I going to deposit money every month? …And please can you tell me some of the terms and conditions which will be helpful for me..Thank you.

    • Kindly go to any bank and make your purchase. You do not deposit monthly, you buy them as and when you want to. There are no significant terms and conditions. The bank will answer any question you may have.

  5. Hi Jerome, your explanations and advisory feedback are very much laudable. How can i get in touch with you?

  6. Hi Mr. Kuseh,

    Please what’s is the minimum amount for fixed deposits, for how long should the funds be kept for maturity and which institutions offer higher rates (if you could please use a figure as an example to workout interest to be earned on maturity)? Thank you

    • Fixed deposits usually start from about GHS2,000. Interest rates and the minimum usually depend on the institution so do check with banks and other financial institution.

  7. Hello Jerome,

    Thanks for this enlightening lessons.

    Apart from Government T-Bills, is there any bank or MFI that offers more than 13% (say up to 20% or more) interest rate on long-term fixed (2 to 5yrs) deposit?

    Thanks
    Harold AD

  8. Sorry I forgot to ask this: Is there any bank or MFI in Ghana that offers compound interest rate on fixed deposits (with monthly contributions)?

  9. So u are telling us that if u invest 1,000 ghc ur interest is only 32.50 ghc what is that can u please work the percentage for one investing in t bill for one year for 4, 000 ghc what will be my interest
    Thanks

  10. Hello boss, you are a blessing to this generation. Pls keep it up.

    I want to save GH¢500 every month for the next 1 year. What will be the best advice to go by this. I need to invest. Pls advice me.

    Pls some calculations will be helpful

    Davies from Accra

    • Hello Davies, the easiest way is to request that your banker deducts GH¢500 each month to be deposited into an investment – say treasury bill, fixed deposit or mutual fund. The best choice depends on if you plan to withdraw the money after the year is done or you plan to leave it there. Know that T-bills is usually best for the short-term especially when you need to be able to withdraw the money at anytime. Fixed deposits pay higher interest but you may not have ready access to your money and consider mutual funds only if you are thinking long-term. The choice depends on what your financial goals are. Good luck!

  11. Hi Jerome, good write up. I found it very useful
    However, I have two questions:

    1. How are the t bills calculations made? I used the 13% rate you gave as at October to calculate for a return on 1,000 gh for 3 months but i didnt get 32.50gh. i rather arrived at an interest of 130 gh. Can you kindly clarify that for me?

    2. How are interest on t bills calculated? Is it done using the rate at the time of purchase or rates at the day of maturity?

    Thank you.

    • Hello Louisa, 13% is an annual rate. Therefore if you invest for 3 months you only get (3/12 * 13%). The rate at the time of purchase is used. But keep in mind that it will be rolled over after the 3 months (if you choose not to withdraw) at the prevailing rate.

    • 13% is the annual rate, that is : ( 13/100)×12=Gh 130. For three months, thus one fourth (1/4)of the year, find one-fourth of of the yearly rate, Gh130. That is (1/4×130) and that gives you Gh 32.5

  12. Please what’s is the minimum amount for fixed deposits, for how long should the funds be kept for maturity and which institutions offer higher rates (if you could please use a figure as an example to workout interest to be earned on maturity)? Thank you

  13. Please you say the interest rates range from “13-25% depending on the amount and institution “? As in the more money invested the higher the interest? Pls explain further

      • Please how do you calculate the interest rate for tbills? For example 91 days 13% rate of 1000cedis investment, how much will that be after the 91 days please? ..Thanks

        • Sorry please delete me recent question, cant seem to delete it myself.. just saw your explanation above. Sorry once again

  14. Please I heard Ecobank is in partnership with MTN mobile mobile treasury bill.. What interest will I get when I buy it 100Gh for 182 days.???

  15. Great site for all who have problem with financial discipline.
    Thanks Mr Jerome Kusey.
    Am grateful for your education

  16. Hello Jerome, am Rashad I have this cool Ghc5000 I was want to invest for a year.. tbills or fixed deposit, which do you recommend…is fixed deposit as risk free as tbills?

    • Hello Rashad, t-bills are risk free. The risk level of fixed deposits depends on the institution you save it with. Fixed deposits usually offer higher interest rates. Your choice depends on your risk tolerance. If you’re ready to bear the risk then you should go for fixed deposits with a reputable institution. However, if your goal is first to protect your capital, then go for t-bills.

  17. Hello Jerome, God bless you for serving your generation. Please I want to ask if one has purchased let’s say ghc 1,000 t bill and it’s not up to maturity please can he or she purchase another if they wish to? Thank you

    • Treasury bills usually don’t depend on where you buy them because you’re essentially buying from the govt. Just be sure it’s an institution of some repute you’re buying from

  18. Hello Jerome, I am in the US, can I let some one in Ghana purchase the T- bill for me and I access my accounts on line?

  19. hello again, I am kwame from the US. Can you please calculate the interest on $1000 for 182 days T-bill for one year?

  20. My husbands father has passed and he was from Ghana. We are told he has a treasure bond there and we are wondering how to find out this information? Thank you!

  21. If the rate is 13% for a year, then you get Ghc11300 at the end of the year. That is 13% multiplied by Ghc10000. so its 0.13 times Ghc10000 which will give you Ghc11300. meaning a profit of Ghc 1300.

    But if the rate is 13% for 91 days,
    then its 0.13 times Ghc10,000. you get Ghc1300 for the 91 days as profit. Meaning you get roughly Ghc 433.33 monthly.

    I may be wrong, but it suggests that, the higher you invest in the TBills, the more you profit, though small.

    Anyway its better than let your money earning nothing on you deposit as it is the case for most of us.

    • Wrong please, just find 13%of 10000 and multiply the result by 12 to get the annual interest. You will get 1300.For 3months,thus one-fourth or a quarter of the year, please just divide the annual interest, 1300 by one fourth. That is (1÷4)×1300= Gh¢325. Therefore you are receiving an interest of Gh¢325 every three months on your Gh¢10000

  22. My question is that sometimes am confused with the rate whether for 3months or annual . It is often stated as a 91 day bill but usually not per annum or annual. For example below

    Bill Rate %

    91 Day Bill 13.3412
    182 Day Bill 13.8933

    As it is as above, a TBILL for 91 days interest rate is 13.34%, am I correct? Or the 13.34% for 91 day should be taken as annual rate even though it is stated 91 day rate?

  23. Please if you buy a treasury bill for a period of 3 months and want to withdraw all (that IS both your interest and principal ) at any point in time when you have choosen it to be rolledover without interest.Could that be possible?

      • Plz, I’m Augustine, can I withdraw my T- Bills money anytime I wish once the estimated time or period has not reached it peak? Let’s say 91 days and the maturity date has not been reached. Also can I go for statement after 1 month

  24. Hi jerome.please at the current rate.if I want to invest like 100000ghs for one yr.what will be my interest?

  25. Hi Jerome I had 2 questions. My family is Ghanaian but I have only a USA passport. Does Ghana report the earnings to the US government. if so if I get my permanent resident card they will not notify the US government about my investments?

    Also what is the difference between a fixed deposit from the bank of Ghana and a T-bill from the Bank of Ghana? Is the Bank a part of the government?

  26. Hi Jerome

    What is the difference of a discount rate and interest rate? They list both on here but I hear them use them interchangeably which confuses me.
    The Discount Rate Interest Rate
    91 – Day is 12.9176% 13.3487%
    182 – Day 12.9792% 13.8800%

  27. Hi, I just came across this site from google. I will like to know how capital and interest will be calculated if I invest an amount, say 1000ghc in treasury bill and request the bank to roll over capital n interest for a period of one year. Thank you

  28. Thank you so much. It helped a lot.
    And like you said, it bothers some people to do something that everybody’s doing. And so I was wondering if you could shed some more light on some other investment avenues.

  29. good job man…BUT ALL I SEE IS SCARED PEOPLE HERE…GET A JOB THAT PAYS YOU A LOT…AND HAVE FINANCIAL FREEDOMMMMMM

    • It depends on where you buy. Usually if it’s at a bank you save in and you’re requesting they take your money from the account, you usually don’t get a receipt. But you can ask for it

  30. Hi , this is Love… I have requested ma bank to invest Gh1500 from ma account to tbills n I chose interest n Principal rolled over annually but pls does it mean I in every 91 days the rolling over will done until a year? Cus I thought of it n wanted to change that option to every three months. Pls what should I do

  31. Hi kuseh, please if I buy a t-bill with a face value of 2000ghc for 1year. What would be my interest? Please kindly show me the formulae for calculating t-bill interest.
    Thanks

  32. hi please I went in for. A loan of 5000 to use it for my distance course for 2years and at the same time I want to invest the money so that the returns or profit will be used to cater for my school . Please advice me on the best investment opportunity for me as family man. Thank you

  33. Hello Jerome, I want to begin a fixed deposit investment. Can you kindly email me some reputable institutions that offer competitive rates? Thanks!

  34. Hi Jerome.I want to terminate my 20,000 GHC t-bill 3months but I want to know how long it will take for them to credit the funds into my account.

        • Please. What would be the pros and cons of investing In a 182 vs 1yr T-Bill? I would like to invest $100,000 USD. Current rates: 182 days =14.3175% 1yr + 15.0000%. My plan would be to leave the money for full maturity.

          • With the 182-day bill at 14.4002%, you’ll make 14,918.61 if you leave the investment for 1 full year. You’ll make 15,000 if you buy the 1 year note so that is a better option. However, you’ll have to convert your funds to cedis in order to purchase these.

  35. Please sir I asked at my bank and the lady said the interest rate is 14.2 on the t bill. So please help me calculate how much am to earn. I purchased a T bill of 3,000 for 182 days. Thank you. Yusif Accra

  36. Thanks a lot Jerome for your piece. You actually solved part of my problem.
    But does it mean that the faith of your income does not depend on the bank you are investing with since treasury bills are given by the government through the banks. Supposing the bank collapse is your money safe or not. And if it is safe, how do retrieve your investment.

  37. Hello sir please can you differentiate between a 91 or 182 days tbill or FD and their interest rate when I invest about 3000ghc

  38. Hello Sir, Am much grateful to be on this site. I am a young man and i want to start some investment for the next five years with Ghc 10,000 , Can kindly tell me if i invest by Fixed deposit how much will i earn for a year so that i can rollover to 5 years period . Thanks Boss. Your advice is really needed urgently

  39. Hi …sir
    I bought a t bill 2months ago and I want to terminate it.
    I want to know what would happen to my interest

  40. Hi Jerome!
    I am glad you are here.
    Please what happens if I buy Treasury Bill and my financial institution collapses?
    Will I still be able to get my investment back with the interest from Bank of Ghana through a different bank?

  41. Hi Jerome!
    I am glad you are here.
    Please what happens if I buy Treasury Bill and my financial institution collapses?
    Will I still be able to get my investment back with the interest from Bank of Ghana through a different bank?

  42. Hi Jerome, how long does it normally take for my bank to sell my treasury bills? I bought some t-bills through GCB recently but I have asked them to rediscount my bills before they mature and send the proceeds to my account in the US. It’s been more than one week and I’m being told they’re still waiting for approval of my request. I’m afraid I’m going to miss out on some urgent investment here. The pace of business in Ghana is toll slow. My banker in Ghana does not respond to phone calls and text messages. Frustrating!

  43. Hi Jerome
    Please assume I bought 365 T bill at 17%. If next month the interest rate falls to 16%, would my investment be affected? Would the 17% stand till maturity date or it would change to 16%?

  44. Good day Sir, please I want to know if I invest GHC10000 in treasure bill for one year how much I can earn from it. Thanks

  45. Good evening sir, what makes T_bill more important than fix deposit and why T-bill is risk free than fix deposit?? And why fix deposit interest is higher than T- bill coz I want to buy T_bill but I have caculet the interest rate to fix deposit and I can see fix deposit is the best to T_bill. Thanks

    • Please when using a compound formula for treasury bill in terms of starting with ghs 20,000 and 10,000. What would be the Interest earned for the period of 3 months

  46. Please I want to understand something here. When using compound formula for treasury bill in terms of starting with ghs 20,000 and 10,000 for 3 months period. What would be the Interest earned

  47. I am Christian Arthur, Obuasi, I want to know if I invest Ghc4000 for 3 months what will be the interest. And if I want only principal to be rollover, will it be possible?

    Thank you

    • Riches (13÷100)×46000=Gh¢5980.Therefore should you leave your investment for one full year it will attract an interest of Gh ¢5,980. If you want to know how much interest is gained every three months just divide 5980 by 4. If you still want to how much interest is gained every month on your 46000, please just divide the annual interest, thus 5980 by 12months.

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