Is It Too Late to Buy Bonds in Kenya?
IFB1/2024 still yields 18.46% — completely tax-free. But with CBK rates likely to ease in H2 2026, is now the right window? A data-driven answer.
📌 Short Answer
- No — it is NOT too late. IFB1/2024 still offers 18.46% WHT-free and trades on the NSE secondary market
- The window may be closing: CBK is expected to ease rates in H2 2026, which will push new bond yields lower
- If you buy now and lock in at 18.46% for 10 years, you capture the peak of this rate cycle
- The real risk is waiting too long — not acting too early
- Minimum to buy on secondary market: KES 50,000 via a licensed NSE stockbroker or DhowCSD
The Global Context: "Higher for Longer" Ends Eventually
Globally, the April 2026 investment landscape is defined by a "higher for longer" rate environment. US 10-year Treasuries hover near 4.0%, global sovereign bonds have sold off as yields rise, and search queries for "bond yield inversion 2026" and "is it too late to buy bonds" are trending at their highest since 2023.
Kenya mirrors this dynamic with a twist: our rates are significantly higher. The CBK benchmark rate is 10.75% — and Kenya's risk premium pushes sovereign yields above 15%. This has created an extraordinary window for Kenyan investors.
The key insight from global markets: when central banks eventually cut rates, bond prices rise and yields fall. Investors who buy bonds now lock in today's high rates for the full duration — earning inflation-beating returns even as new issuances pay less.
Kenya Bond Market — April 2026 Snapshot
| Instrument | Coupon | Net Yield | WHT | Tenor | Min |
|---|---|---|---|---|---|
| IFB1/2024Best overallInfrastructure Bond | 18.46% | 18.46% | 0% (exempt) | 10yr | KES 50,000 |
| IFB2/2023Strong alternativeInfrastructure Bond | 17.93% | 17.93% | 0% (exempt) | 10yr | KES 50,000 |
| FXD2/2023Fixed Rate Bond | 15.50% | 13.18% | 15% | 7yr | KES 50,000 |
| 364-Day T-BillTreasury Bill | 16.42% | 13.96% | 15% | 1yr | KES 50,000 |
Why IFBs Are the Best Bond Kenya Has Ever Offered
Infrastructure Bonds (IFBs) are issued by the National Treasury to fund specific infrastructure projects. By law, interest earned on IFBs is completely exempt from income tax and withholding tax — you keep 100% of the coupon.
Compare this to a fixed-rate bond: a 16.80% FXD bond nets you 14.28% after 15% WHT. The IFB at 18.46% nets you the full 18.46%. That 4%+ spread is enormous compounded over 10 years.
✅ Reasons to Buy Now
- Lock in 18.46% tax-free for 10 years
- If CBK cuts rates, new bonds will yield less — but yours doesn't change
- Bond price appreciation: as yields fall, your bond value rises (capital gain + coupon)
- Best risk-adjusted rate in Kenya — zero credit risk (government issuer)
- Available on NSE secondary market today — no need to wait for next auction
⚠️ Risks to Consider
- Long duration (10yr) — your capital is locked unless you sell on NSE
- If CBK raises rates further, new bonds will offer even more
- Secondary market liquidity: NSE bond market can be thin
- You need a CDS account and a licensed broker (1–3 day setup)
- Not suitable for emergency funds — use MMF for liquid savings
The Kenya Rate Cycle: Where Are We Now?
CBK cut its benchmark rate from 13.0% to 10.75% in late 2025 — signalling the beginning of an easing cycle. However, sticky inflation (currently at 6.3%) and the shilling's stability concerns have kept the CBK on hold through Q1 2026.
Market consensus: CBK is likely to cut once more in H2 2026 (to ~9.5–10%) if inflation cools. When that happens, T-Bill rates will fall from 15–16% toward 13–14%, and new bond auction rates will follow. Bonds issued today at 18.46% will look exceptional by 2027.
The bond ladder strategy many global investors are applying — buying bonds at different durations to capture peak rates — directly applies in Kenya. An IFB purchase now is the long-duration anchor of that ladder.
How to Buy Kenya Bonds in 2026
Via CBK Auction (DhowCSD)
Register at dhowcsd.centralbank.go.ke with your ID and bank account. Auctions run every Monday. Minimum: KES 50,000. Best for primary market access.
Via NSE Secondary Market
IFB1/2024 and IFB2/2023 trade daily on the Nairobi Securities Exchange. Use a licensed stockbroker (NCBA, Dyer & Blair, Faida). Commission: ~1.5%.
Via Ziidi (Safaricom)
Ziidi is expanding bond access for retail investors. Watch for IFB availability on the Safaricom/Ziidi platform — currently being rolled out.
📊 Example: KES 500,000 in IFB1/2024
Annual coupon (18.46%)
KES 92,300
WHT deducted
KES 0 (exempt)
Net annual income
KES 92,300
Monthly income
KES 7,692
10-year total income
KES 923,000
vs savings account (4%)
+KES 723,000 more
Track Kenya Bond Yields Live
See IFB bond yields, T-Bill rates, and CBK policy rate — updated daily on Sentill Africa.
Disclaimer: This article is for informational purposes only and does not constitute licensed financial advice. Bond yields are as at April 2026 and may change. CBK rate projections are consensus estimates only. Verify all rates with CBK and your broker before investing. Sentill Africa does not hold or manage investor funds.