How to Make Money With the Safaricom 10.40% Tax-Free Bond (And Use It to Build Your Shares Portfolio)

Most people only think of buying shares when they hear about “investing.” But right now, Safaricom has a 10.40% tax-free bond that gives you a smart, safer, and more predictable way to build wealth.

This blog explains exactly how you can use the Safaricom bond to grow your money, build a shares portfolio without using your salary, and still get your full capital back at the end. Let’s break it down in very simple terms.

1. What Is the Safaricom 10.40% Tax-Free Bond?

Safaricom has issued a Medium-Term Note (MTN) — this is basically a loan that investors give the company. In return, the company pays you interest every year, and returns your full money when the bond matures.

Key facts:

Interest rate: 10.40% per year
Tax: ZERO tax on the interest
Payments(when you receive interest): Every June and December
Minimum investment: KES 50,000
Tenor: 5 years
Your capital: 100% returned at maturity
Costs: No brokerage fees, no commissions deducted

This is one of the most stable ways to grow money because the returns are fixed and guaranteed.

2. How Do You Make Money From the Safaricom Bond?

You earn in two simple ways:

Interest payments

Interest is paid twice a year and is tax-free.

Example: If you invest KES 100,000 you earn KES 10,400 per year, paid as KES 5,200 in June and KES 5,200 in December.

Return of capital

At the end of 5 years, Safaricom returns the full amount you invested.

So if you invested KES 100,000 you would have received:

KES 52,000 in total interest over 5 years (KES 10,400 × 5)
Your original KES 100,000 returned at maturity

3. Why This Bond Is Better Than Jumping Straight Into Shares

Many beginners rush into buying shares and then get stressed when prices fall. With this bond:

Your capital is protected
You earn guaranteed income
You avoid emotional buying and selling
You get stable returns even if the stock market is down
You can start investing without stress

It’s an ideal foundation before entering the stock market.

4. The Wealth-Building Strategy: Use Bond Interest to Buy Shares

Here’s a simple, practical strategy:

Invest your capital in the Safaricom bond. (Examples: KES 50K, 100K, 200K, 500K, 1M)
Every June and December, use the bond interest to buy shares. This means you build a shares portfolio without touching your salary.
When those shares pay dividends, reinvest the dividends to buy more shares.
At maturity (after 5 years), your original capital is returned. Your share portfolio continues to grow independently from the returned capital.

This creates two income streams:

Bond interest (paid twice a year)
Dividends from the shares you buy (annual or semi-annual)

5. A Simple Example (KES 200,000 Investment)

If you invest KES 200,000 in the bond you earn KES 20,800 per year, paid as KES 10,400 in June and KES 10,400 in December.

Use that interest to buy dividend-paying shares such as Safaricom, KCB, Cooperative Bank, Equity, ABSA or NSE ETFs. After 5 years you will have received KES 104,000 in interest which can be fully invested in shares, while your original KES 200,000 is returned.

Your shares should by then be producing dividends which you can reinvest to buy more shares — that’s automatic growth.

6. Why This Method Works So Well

Your capital is safe: Unlike direct share investments, the bond returns your capital 100% at maturity.
Interest is guaranteed: You know exactly how much you will receive and when.
No brokerage or commission: The bond has no broker fees, so your entire capital earns interest.
Build a portfolio with “free money”: You use interest (not salary) to buy shares.
Compounding: Bond interest buys shares → shares pay dividends → dividends buy more shares.
Beginner friendly: No market timing needed; disciplined accumulation works best.

7. Who Should Consider This Approach?

This strategy is suited to:

First-time investors
People who fear losing capital in shares
Anyone building a long-term wealth plan
Parents investing for their children
Chamas and family investment groups
Investors who want two predictable income streams

8. What You Need to Start

To begin you only need:

A CDSC account (your shares account) — the same account you use for shares is used for corporate bonds. If you don’t have one, AIB-AXYS can open a CDSC account for you in 5–10 minutes.
Minimum amount: KES 50,000 (you can invest more to earn more interest).
Apply online: https://safaricombond.e-offer.app

9. Final Thought — Start With Safety, Grow With Strategy

Many investors lose money because they begin with risky investments. The Safaricom bond gives you a safe, guaranteed, and predictable way to build long-term wealth: