- Nairobi Stock Exchange stocks
- cds account in Kenya
When it comes to investing in Kenya, understanding the financial tools available is essential. Two crucial accounts that every investor should know about are the Dhow Central Securities Depository (CSD) account and the Central Depository and Settlement (CDS) account. While both are vital for investment, they serve different purposes.
What Is a Dhow CSD Account?
The Dhow CSD (Central Securities Depository) account is specifically designed for investing in Treasury Bonds and Treasury Bills in Kenya. Treasury Bonds are low-risk, government-backed securities that offer fixed returns over a specified period.
Features of a Dhow CSD Account:
- Purpose: Used exclusively for buying and managing Treasury Bills and Bonds.
- Managed By: The Central Bank of Kenya (CBK).
- How to Open: You can open a Dhow CSD account in two ways
DHOW CSD App on Playstore or
DHOW CSD investor Portal (Website)
- Target Audience: Ideal for risk-averse investors looking for stable and predictable returns.
What Is a CDS Account?
The Central Depository and Settlement (CDS) account is used for trading in stocks or shares listed on the Nairobi Stock Exchange (NSE). It is essential for anyone looking to invest in the equity market.
Features of a CDS Account:
- Purpose: Facilitates buying and selling of stocks.
- Managed By: The Central Depository and Settlement Corporation (CDSC).
- How to Open: You can open a CDS account through stockbrokers or investment banks licensed by the Capital Markets Authority (CMA).(You cannot do it by yourself)
- Target Audience: Perfect for investors interested in higher-risk, potentially high-reward investments.
| Aspect | Dhow CSD Account | CDS Account |
| Purpose | Investing in Treasury Bonds | Investing in stocks and shares |
| Management | Central Bank of Kenya (CBK) | Central Depository and Settlement Corporation (CDSC) |
| Risk Level | Low-risk | Medium to high risk |
| Returns | Fixed and predictable | Variable and market-dependent |
| Opening Process | Through CBK | Through licensed stockbrokers |
Which Account Should You Choose?
Your choice depends on your investment goals:
- If you prefer low-risk, stable returns: Opt for a Dhow CSD account to invest in Treasury Bonds.
- If you’re ready to take on more risk for potentially higher rewards: A CDS account is ideal for stock trading.
For those looking to diversify, consider opening both accounts to enjoy the benefits of low-risk bonds and higher-return equities.
Watch the video below on how open a dhow csd account