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How To Invest in Treasury Bills in Nigeria

December 6, 2021 by Finance

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.

how to invest in treasury bills in Nigeria

Table of contents

  • What are Treasury Bills?
  • Who Can Buy Treasury Bills?
  • How to Buy Treasury Bill in Nigeria
  • What Is The Duration For Holding Treasury Bills?
  • When do they sell?
  • Where Can You Buy Nigerian Treasury Bills?
  • Treasury Bills Or Government Bonds?
  • What are the benefits of Investing in the Nigerian Treasury Bills?

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:

  • Individuals
  • Firms
  • Institutions
  • 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.

Read this -  Hedge Funds in Nigeria - Meaning and How They Work

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.

central-bank-of-nigeria-treasury-bills

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
Read this -  Value Added Tax in Nigeria – Meaning and Rates

Bottom Line

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.

You can obtain a comprehensive loan, tailored to your specific needs by using this platform. Basically, it allows you to compare loans from different lenders across Africa, ensuring the best option doesn’t slip through.

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