Investing Made Easy: How to Get Started with Treasury Bonds in Uganda

Good morning!

This writeup is for those of you interested in investing in treasury bonds and treasury bills in Uganda. Today, we will discuss the entire process of how to start investing in these financial instruments.

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First and foremost, if you have a bank account with a commercial bank in Uganda, you are eligible to invest in treasury bonds and treasury bills. This applies to everyone—foreigners, locals, children, and the elderly. The primary requirement for investing in treasury bonds is simply having a bank account. Therefore, anyone with a bank account at any commercial bank in Uganda can invest in treasury bonds. Additionally, if you have multiple bank accounts across different banks, you can invest in various bonds legally.

Now, let’s talk about two essential components when investing in treasury bonds. The first step is to open a Central Securities Depository (CSD) account. To do this, you need to fill out a form, which you can obtain from any commercial bank—be it Post Bank, Absa, Stanbic, DFCU, Housing Finance, Standard Chartered, Equity, Bank of Baroda, or NCBA. You must already have a bank account with the bank you choose.

If you want to create an investment account with a new bank where you do not have an existing account, you will first need to open a bank account before filling out the CSD account opening form. On this form, you will need to provide specific information, including your individual capacity to invest or your company's details if you are investing on behalf of a business. As long as your company has a bank account—say, with Stanbic or Absa—you can invest in treasury bonds.

For individuals, you will need to provide personal details such as your gender, date of birth, and nationality. This applies to both local and foreign investors. For instance, if you have a friend in Kenya interested in diversifying their investments in Uganda, they can also participate as long as they can open a bank account in Uganda.

Once you have filled out the form, you will need to specify your settlement bank, which is the bank you are dealing with. You will also need to provide your account details at the settlement bank. If you are opening an individual account, you will be the only authorized signatory. However, if you have a joint account or a company account with multiple signatories, you will need to include the necessary individuals.

After completing the form, sign it and attach a passport photo. If there are multiple signatories, each person must attach their own passport photo. Submit the completed form to the bank to open your CSD account. It is crucial to have this account, as it is a prerequisite for investing in treasury bonds. When you approach a bank to buy a bond, the first question they will ask is whether you have a CSD account—similar to being asked for a passport or national ID.

Once your CSD account is open, there are two important markets to understand when investing in treasury bonds: the primary market and the secondary market. The primary market follows a specific calendar, with the next auction scheduled for April 16, 2025, featuring two-year, five-year, and fifteen-year bonds.

To participate in the primary market, you must fill out the CSD Form 2, which is the auction form. This form must be submitted at least two to three days before the auction, but it is advisable to submit it a week in advance to ensure timely processing.

To fund your investment, simply deposit the required amount into your bank account, fill out the auction form, and submit it to the bank. The bank will then handle the transaction with the Bank of Uganda, which will allocate the treasury bond to you. For those in the diaspora, check with your bank to see if they allow you to send these forms via email. Some banks do permit this, making it easier for you to invest from abroad.

In the secondary market, you can buy any bond at any time, regardless of its maturity. The form you will fill out for secondary market transactions will include details such as the dealing date, the selling dealer, and the buyer (you). If you decide to sell a bond, you will need to fill out a similar form indicating the transaction type.

In summary, before you can invest in treasury bonds, ensure you have a bank account and a CSD account. Once you have these in place, you are ready to explore the opportunities in treasury bonds. Thank you for your attention, and I hope this information helps you on your investment journey!

Alex Kakande