Comparison
Treasury bonds vs treasury bills in Uganda: which suits you?
Updated 2 Nov 2026 · 2 min read · By Capital & Context editorial team
Both treasury bills and treasury bonds are loans to the Government of Uganda, sold at Bank of Uganda auctions. The difference is how long you lend for and how you're paid.
What is the short version?
- Treasury bills last 91, 182 or 364 days. You buy below face value and get the full face value at the end. The 364-day bill yields 14.50% (364-day bill, before tax, BoU auction, 21 Oct 2026).
- Treasury bonds last from 2 to 25 years. You get a fixed interest payment, the coupon, every 182 days, and your face value back at the end. A 10-year bond yields 16.85% (10-year bond yield, before tax, BoU auction, 7 Oct 2026).
When are bills commonly used?
- For money you may need within a year.
- To keep reinvesting at whatever the current rate is.
- To start small and short while you learn how auctions work.
When are bonds commonly used?
- For a regular income every six months, for example towards school fees or retirement.
- To lock in today's rate for years, which helps if rates later fall.
- By people comfortable leaving money invested for a long time, or selling on the secondary market if needed.
What is the difference between coupon and yield?
A bond's coupon is fixed when it is first issued. The yield is what you actually earn, which depends on the price you pay at the auction. When the yield is above the coupon you pay less than face value; when it is below, you pay more. Our treasury bond calculator shows the price and every coupon payment for your amount.
How is each taxed?
Withholding tax is 20% withholding tax (treasury bills and 2, 3 and 5-year treasury bonds, Bank of Uganda, 31 Jul 2025) for bills and for 2, 3 and 5-year bonds, and 10% withholding tax (treasury bonds of 10 years or more, Bank of Uganda, 31 Jul 2025) for bonds of 10 years or more. It is taken from each coupon, and from the discount when you paid less than face value.
What are the risks?
Government securities carry very low risk of not being paid back, but bond prices move. If you'd rather keep money reachable within days, a money market fund is a common alternative. If interest rates rise after you buy, the price you could sell for falls. That only matters if you sell early. Inflation also eats into a fixed return over long periods.
See today's yields on our treasury bill and bond rates page, or follow how to buy treasury bills step by step.