Co-op Bank introduces hassle-free way of investing in government securities
Many individual and corporate investors are putting their money in government securities as they considered as risk-free investments
Co-op Bank has offered its customers and easier option on how to invest in government securities without any paperwork involved.
One can now pay for Treasury Bills and Treasury directly from the Co-op Bank account via MCo-opCash or *667# meaning you do not need to queue to make the transaction.
“Invest in Government Securities with Ease! Now you can pay for T-Bills and T-Bonds directly from your Co-op Bank account via MCo-opCash or *667#. No paperwork No queues 100% secure and convenient Just log in, tap on Bills, select T-Bills/T-Bonds, and pay!” the lender posted on its social media handles on Thursday.
Many individual and corporate investors are putting their money in government securities as they considered as risk-free investments.
They provide you with a return and/or a consistent source of income over a specified period of time.
“Investors who buy these securities are loaning money to the government, which promises to repay those investors after a specified period of time, called maturity. Investing in government securities is a simple process that you can undertake through the Central Bank directly or through a commercial bank or an investment bank,” a note by the Central Bank of Kenya says.
The latest option by Co-op Bank, however, makes the process easier as one can invest from the comfort of their sitting rooms or while on the move eliminating the need to physically visit a bank branch.
Treasury bills are a short-term investment, with maturities of 91 days, 182 days and 364 days. This means that if you invest money in a Treasury bill, you will receive that money back within three months, six months or one year, depending on the bill you choose.
Investors make money on Treasury bills because they are sold at a discount. For example, if you invest in a 91-day Treasury bill, you will pay less than the bill’s face value, but after 91 days you will receive the full face value.
If you’d like to purchase a Treasury bill, you must invest a minimum of Sh50,000.
On the other hand, Treasury bonds are medium- to long-term investments, and their maturity can range from one year to 30 years. There are many different types of Treasury bonds, but their basic operations are similar.
In this case, investors buying Treasury bonds are loaning the government money for a specified period of time, which is the bond’s maturity. With most bonds, investors will receive interest payments every six months throughout that period of time, and at the end of that period they receive the face value amount that they invested.
If you’d like to purchase a Treasury bond, you must also invest a minimum of Sh50,000.
