A Beginner’s Guide to Investing in Treasury Bonds & Bills

In 5 easy steps

Introduction to the Series

Investing in government bonds and treasury bills is one of the safest ways to grow your money. Whether you’re an individual investor, part of an investment club, or an offshore investor looking for African market exposure, this blog series will guide you through everything you need to know.

From understanding the basics to buying, selling, and maximizing returns, we break it down in simple, clear steps.

Step 1: Understanding the Basics

Before you start investing, you need to understand what government securities are and how they work.

1. What is a CDS Account? (A CDS account is your digital wallet for holding treasury bonds and bills.)

2. How to Open a CDS Account (Step-by-step guide to getting started.)

3. What is a Treasury Bill? (Short-term investments with no interest payments but guaranteed returns.)

4. What is a Treasury Bond? (Long-term investments that provide fixed interest payments.)

5. Treasury Bills vs. Treasury Bonds – What’s the Difference? (Compare and choose the right option for your investment goals.)

Step 2: How to Buy and Sell Bonds

Once you understand the basics, it's time to learn how to buy and sell government securities.

1. What is a Treasury Primary or Auction Market? (Where and how new bonds and bills are issued.)

2. How to Buy a Bond at a Treasury Auction (Step-by-step guide to bidding and purchasing.)

3. What is an OTC Market? (Where bonds trade after their initial issuance.)

4. How to Buy a Bond on the Secondary or OTC Market (How to buy bonds from other investors.)

5. How to Sell a Bond on the Secondary or OTC Market (How to exit your investment before maturity.)

Step 3: Understanding Pricing & Returns

Bonds are priced based on market demand, interest rates, and time to maturity. Here’s how to assess their value.

1. How Treasury Bills and Treasury Bonds Are Priced (Explains bond pricing, including face value, yield, and market fluctuations.)

2. Treasury Bill and Treasury Bond Terms Explained (Key terms like coupon rate, premium, discount, and ISIN explained in simple terms.)

3. What to Look for When Investing in Government Bonds (Factors like interest rates, inflation, liquidity, and taxation to consider before investing.)

Step 4: Comparing Bonds to Other Investments

How do bonds compare to other low-risk investments?

1. Unit Trusts vs. Bonds: Which Investment is Right for You? (Breakdown of unit trusts vs. bonds, their risks, and returns.)

Step 5: The Final Takeaway

1. Conclusion: Why Bonds Should Be Part of Your Investment Portfolio (Summarizes the key benefits and why bonds make sense for different types of investors.)

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