A government bond can simply be defined as lending your government money and in turn you will be paid periodic interests. Your principe will be repaid back on maturity.
I had a strong discussion with my friend on businesses that will always guarantee you safe returns on your investment and when I informed him on the buying of bonds he was surprised and told me that it’s only banks and big financial institutions that are allowed to participate in that business.
He had little info on that sector and thats why I decided to write this article on bond to educate my fellow youths who are like him.
How much can PROFIT can the bond buying Business Give you??
The Kenyan Bond Details
- Interest rate- average value is around 14%
- Interest payment- the interest is paid twice a year ( after 6 months)
- Bond are tax free
- Minimum investment is 3000 ksh
Case example: If you purchase bonds woth 5,000,000 ksh this is how much profit you can get
thus annually your investment will yield a profit of 700,000 annually which means that you will earn 350,000 after every 6 months since the interest is paid twice in a yr.
N/B: You can invest any amount. Minimum investment is 3000 ksh. However high investment amounts will yield high profits as opposed to low investment volumes.
How can you buy government bonds in Kenya?
With the development of mobile money in Kenya a platform known as M-Akiba was devised.
To purchase a government bond you will only be required to
- Register by dialing *889#
- Open central depository account and purchase the bonds.
N/B: Currently the bonds are not on sale. When the announcement will be made rest assured we will inform you.
How some parents pay Fees with Bond Money
This is a real life case that i have decided to share with you. There is a parent I know who has 2 children pursuing medicine and pharmacy. The two courses are expensive and they averagely cost 800,000 ksh yearly when he pays for both.
What the parent did in order to survive the hard financial time is selling a piece of land worth 5.5 million and investing the money in bonds.
His yearly interests are usually around 700,000 which is used to pay the fees without much stress