Officials from PostBank Uganda have shared tips on how individuals can explore the bank’s different investment options and benefit from government securities and how these operate.
Officials highlighted the different investment products a customer can utilize at the bank and these include: fixed deposits, call deposits, flexi fixed deposits, and the savings on the bank’s Wendi mobile app that they said gives the customer an interest rate of 10% per annum on a daily basis.
Under government securities classified as treasury bills or treasury bonds, the public or individuals can lend to the government, or the government can borrow from the public or an individual by issuing government paper (treasury bills or treasury bonds).
Treasury bills are instruments or government papers with a maturity period maximum of one year. They have 182 days, which is close to six months, and then 91 days, which is relatively three months and 364 days.
Treasury bonds on the other hand have a maturity of more than one year, these are in the form of two years, three years, five-year, there’s a 10-year, a 15 year, and currently, they have been maximized at 20 years.
These forms of securities are issued by the government agent, which we know is the Bank of Uganda.
During a session hosted on PostBank’s X Space, formerly Twitter, experts urged individuals to consider options like Treasure Bill, and Bonds among other financial ventures they can diversify and grow their investments.
The head of Financial Markets at PostBank Uganda, Iga Huzairu, explained that Treasury Bonds and Bills can be found in primary markets, where the government has a defined auction calendar to enable one to know when a treasury bill, a treasury bond is going to be auctioned.
He said that another instance is when government comes in with private auctions, but ideally, they issue a calendar. You will know when to buy a given security at a primary market.
Iga noted “A secondary market is available every day at any point in time. One can buy these securities from any commercial bank at any point in time. For these securities, the minimum amount you can invest is shs. 100,000 and above. So, anyone can invest in these securities as long as you have shs100,000 and above. In terms of interest rates, these securities have different interest rates given the period and also the market condition as and when these auctions are issued. So, a person, an individual, a company, a government agency, a resident, can invest in these securities”.
He encouraged customers to use the bank’s savings options highlighted above, and also diversify to treasury bills and bonds.
Alex Kakande, a financial and investment analyst said, “Instead of someone going and buying a 50 by 100 in Maya, a satellite city at shs. 7 million that they bought in 2021 at shs. 6.5 million, right now it’s shs. 7 million, It has only added just 500,000, if that money had been put in treasuring it would be 13.5%, 14%, which is much better off. So, when it comes to comparing these products, for an average Ugandan, you are going to make better money decisions over a long period by investing in treasury bonds as compared to investing in real estate.”
“That’s not to say someone shouldn’t come back to real estate. As your average wealth grows, if you are investing shs. 4.5 million per year in 10 years, you are looking at 100, if at that point, shs. 50 million, at that point, you can easily afford Gayaza. But at the point when you could afford just shs. 300,000, in those are 34%, yet a treasury bond is 13%”, Kakande concluded.
According to the 2023 FinScope Survey Report, both formal and informal savings range from 54 percent in 2018 to about 60% of Ugandans which represents a 6% increase.
