BoT counsels pensioners: Invest in T-bills, bonds

15Dec 2018
Friday Simbaya
Iringa
The Guardian
BoT counsels pensioners: Invest in T-bills, bonds

Retired civil servants have been urged to invest in government guarantees which is more reliable than business trading.

Bank of Tanzania (BoT) Mbeya Branch Manager Finance and Administration Bakari Ally said when discussing investment education in government securities for small and medium entrepreneurs (SMEs) in the region this week.

 

He said pensioners are supposed to take up investment opportunities in state-owned securities like Treasury bills and government bonds.

BoT sells short-term and long-term government securities as a means of borrowing money from institutions or individuals.

Ally said investing in government guarantees is profitable as investors do not have to worry about profitability while waiting for the securities to mature.

"Investing in government guarantees is safe because the government is not expected to violate the claims of its creditors during payment," he explained.

The official said benefits in government securities can be secured for loans and government guarantees have a satisfactory level of profit.

Investment in government securities is divided into Treasury bills and bonds, managed by the central bank.

An investor incurs no risk by investing in T-bills and bonds and such investments may be transferred to another person or third party, he said.

He said such an investment can also be used to secure loans from financial institutions without inconvenienced.

For one to participate in Treasury bills and bonds trade, a capital of at least Sh5million is needed.

BoT Senior Bank Officer Eudosia Mwidete said Treasury bonds are issued in five maturities namely 2, 5,7,10 and 15 years with a minimum bid amounting to Sh1million.

Treasury bonds are debt instruments issued by the government in exchange for money borrowed from the public and are long-term securities maturing over and are risk free, the officer underlined.

 

 

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