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.


Jerome Kuseh

Accountant | Economist-in-Training | Finance Blogger

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    • Treasury bills are risk-free and liquid, so they are the safest. Other relatively safe places are fixed deposits with reputable financial institutions or mutual funds.

  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 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

  6. 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?

    Harold AD

  7. 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)?

  8. 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

  9. 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!

  10. 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.

  11. 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

  12. 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

  13. 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.???

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

  15. 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.

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