If you are considering options of earning a significant return on your investment within a short period (weeks, months, or max one year), then treasury bills should make your list. Investing in treasury bills in Nigeria is one of the most reliable forms of investments. This is so because it is risk-free and backed by the Federal Government of Nigeria.
In this post, we will be discussing everything you need to know and how to invest in treasury bills in Nigeria.
Table of contents
What are Treasury Bills?
Treasury Bills are short term debt instruments that the government enables via the Central Bank of Nigeria (CBN) to provide short term funding for the federal government. They are the most liquid form of money market instrument. You can read the ultimate guide to treasury bills in Nigeria.
Who Can Buy Treasury Bills?
Individuals that can purchase treasure bills include:
- Banks, etc
How to Buy Treasury Bill in Nigeria
Treasury bills are under the control of financial institutions (banks or stockbrokers). Investing in treasury bills will require filling out a form with your personal information with the amount you are willing to invest as well as your bid rate. Mostly, the minimum amount of treasury bills you can buy depends on the dealer.
What Is The Duration For Holding Treasury Bills?
Treasury bills are short term debt instruments that you can hold for either 91 days, 182 days, or 364 days before maturity. However, you can sell them before maturity incase there is an emergency or you lose confidence in the investment.
When do they sell?
Treasury bills sales occur on a bi-weekly basis as announced by the Central Bank of Nigeria (CBN). They notify the general public of the issuance through pages of print media or their websites. You can also ask your bank officer to inform you.
Where Can You Buy Nigerian Treasury Bills?
You can buy your treasury bills from any official dealer or mobile application. These dealers or brokers are licensed by the Central Bank of Nigeria to purchase treasury bills, and you have to buy through them. Read this for details on how to invest in treasury bills in Nigeria.
Treasury Bills Or Government Bonds?
Bonds and treasury bills are the two types of debt instruments that the government uses to raise funds in the financial market. Treasury bills or T-bills are issued when the government needs money for a shorter period with a maximum maturity period of 364 days. They are traded in the money market.
When the government needs funds for a more extended period, say like five years they issue bonds.
What are the benefits of Investing in the Nigerian Treasury Bills?
- It is a risk-free investment.
- They are very liquid, which means you can easily convert them to cash easily and quickly
- Interest earned is tax free.
- On can use treasury bill as collateral for loans
- Excellent investment opportunities for disposable income
Treasury bills are considered a good and secure investment by many investors around the world. Purchasing treasury bills today are very easy as you can make use of an electronic broker that’s just a click away.
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