How Treasury bills work

What a T-bill is, how the discount works, how the return is calculated, and what to weigh before you buy one in Ghana.

Beginner 9 minutes MINT Explains Updated 22 September 2026

Treasury Bills Made SimpleLesson 1 of 2

A simple explanation

A Treasury bill (T-bill) is a short-term loan you give to the Government of Ghana. The government uses the money to cover its spending while it waits for tax and other income to arrive. In return, it promises to pay you back on a fixed date, with a little extra.

The Bank of Ghana sells T-bills on the government's behalf at regular auctions. In Ghana they are commonly issued for 91 days (about 3 months), 182 days (about 6 months) and 364 days (about 1 year). When the period ends, the bill "matures". You get back the full face value.

How the return works: the discount

Most people expect a loan to pay interest in small amounts over time. T-bills work differently. They are sold at a discount: you pay less than the face value today, and you receive the full face value at maturity. The difference is your return.


Face value (what you receive at maturity)	GHS 1,000
Price you pay today (at a discount)	GHS 960
Your gain after 91 days	GHS 40
Return over the 91 days	40 ÷ 960 = about 4.2%
Roughly, as a yearly rate	about 16.7% (4.2% × about 4)

The yearly figure is only a rough way to compare, because you would have to buy a new bill each time to keep earning it, and future rates may be different.

Two different rates

When the Bank of Ghana publishes auction results, you will usually see two numbers for each bill:

The discount rate is the gain measured against the face value.
The interest rate is the gain measured against the price you actually paid. It is always slightly higher than the discount rate, and it is the one to use when you compare a T-bill with a bank deposit.

Always compare interest rate with interest rate.

How the auction sets the rate

Each week the government says how much money it wants to raise. Banks and other licensed dealers bid, saying how much they want and what rate they will accept. The government accepts the bids it needs, and the rates that result apply to that week's bills. When many buyers want bills, rates tend to fall. When the government needs more money than buyers offer, rates tend to rise.

This is why the rate you read in a newspaper or on the Bank of Ghana website is for that week. The rate on the bill you buy is the one fixed at the auction and does not change during its life.

Example

Suppose Esi has GHS 5,000 she will not need for three months. She buys a 91-day bill through her bank. Say the bill's interest rate is 15% a year, and its price works out to roughly 96.4% of face value.

She pays about GHS 4,820 and is credited with a bill worth GHS 5,000.
After 91 days, the bill matures, and GHS 5,000 is paid to her.
Her gain is about GHS 180.

If she rolls the money into a new 91-day bill, the new rate might be higher or lower. She does not know until she buys. That is called reinvestment risk.

Why it matters

T-bills are one of the most common first investments in Ghana for three reasons. They are backed by the government, the terms are short and clear, and you can start with a relatively small amount. They are also a benchmark: interest rates on many other products, such as fixed deposits and money market funds, tend to follow T-bill rates.

Key things to know

How to buy: through banks, licensed brokers and some approved investment apps. See how to buy a Treasury bill in Ghana.
Rates change weekly. Check the current rate on the Bank of Ghana website before you buy.
Your money is tied up until maturity. You can sometimes sell early, but the price may be lower.
Longer is not always better. Compare what each term pays, and think about when you will need the money.
Rolling over is a new decision each time. Check the new rate rather than doing it automatically.
Fees and tax: ask the provider what fees apply and whether tax is taken at source. Your real return is what you keep.
Compare with inflation. A T-bill that pays less than inflation loses buying power. See what inflation is.

T-bills, bonds and fixed deposits

	Term	How it pays	Backed by
T-bill	91, 182 or 364 days	One payment at maturity (bought at a discount)	The government
Government bond	Longer (for example 2 years or more)	Regular interest payments, then your money back	The government
Fixed deposit	Chosen with the bank	Interest at maturity or regularly	The bank

Risks to consider

If inflation is higher than your T-bill rate, your money loses buying power.
Rates can fall when you roll over, reducing future returns.
Government debt is lower risk than most options but not risk-free. In 2022 and 2023, Ghana restructured many of its longer government bonds in the Domestic Debt Exchange Programme. T-bills were not part of that exchange, but it is a reminder that lending to the government carries some risk.
If you sell before maturity, you may get less than you expect.

Key takeaway

A T-bill is a short loan to the government. You pay a little less than face value today and receive the full amount at maturity, and the difference is your return. Check the current rate, compare it with inflation, and be clear about when you will need the money.

Common questions

Are Treasury bills safe?

They are lower risk than most investments because they are backed by the government, but they are not risk-free. Inflation can be higher than your rate, and future rates can be lower when you roll over.

What is the difference between the discount rate and the interest rate?

The discount rate measures your gain against the bill's face value. The interest rate measures it against the price you actually paid, so it is slightly higher. Use the interest rate when you compare a T-bill with a bank deposit.

Do T-bill rates change?

Yes, at every auction. Once you have bought a bill, its rate is fixed until it matures.

How is a T-bill different from a fixed deposit?

Both lock your money for a period. A T-bill is a short loan to the government, sold at a discount. A fixed deposit is a deposit with a bank. Compare the interest rate after any fees and tax.

This is general financial education, not financial advice. Figures are illustrative. Speak to a licensed professional before making investment decisions.

Figures as of September 2026. Sources: Bank of Ghana, Treasury bill rates, Ministry of Finance, Ghana, Databank, Bank of Ghana treasury securities

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