How to invest in treasury bills in nigeria

How To Invest In Treasury Bills In Nigeria

The Nigeria Treasury bills were issued by the Federal Government of Nigeria through the apex bank, the Central Bank of Nigeria (CBN) to rescue government deficit on funding with short-term provision of funds. The period often ranges from between 91 to 364 days. Investing in treasury bills in Nigeria comes with a wide range of benefits such as zero-default risk on securities, task-free on investment returns, and stock exchange trading. They are often used through a competitive bidding procedure, traded and quoted on FMDQ’s platform.

T Bills, as they are often called, work like government crowdfunding. The funds are provided by individuals to help the government achieve its budgets and are also used as a means to control money supply in the Nigerian economy.

The CBN has given the lowest investment figure as N50 million. However, other financial institutions that purchase from CBN have been licensed to sell to retail investors for a lesser amount. So, individuals who cannot afford the huge sum provided by the CBN can buy from these institutions for between N50,000 and a few million Naira.

There are some charges that you’ll incur for receiving the services. And it depends on a number of factors which include the financial institution that you use and project investment figure.


  1. Upfront payment of interests allows investors to seize opportunity on monetary time value.
  2. Treasury bills are regarded low or void of investment risks.
  3. The produce is competitive.
  4. The income grown from Treasury bills is tax-exempt.
  5. Guaranteed capital security and preservation.
  6. Investors receive interest upfront.
  7. Diversification of portfolio and well-balanced mix to reduce portfolio volatility.
  8. An investment made on Treasury bill is tax-free.
  9. Trading on the stock exchange.
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There are just a few demerits of investing in T-Bills in Nigeria which you’d need to know about. They are:

  1. Investments can’t be rolled over. In essence, every time you bid, you’ll bear the costs.
  2. Investment returns are often just a little beyond the inflation rate.


For you to become eligible as a Treasury bill investor, you do not have to hold any special certificate or position in the public.

Any public individual from public or private institutions, corporate organizations, brokers, discount houses, or banks can become eligible.


A data from November 13, 2020, reveals the yield for treasury bills and their tenor. However, this may differ from future rates which could be higher or lower from the present data considering supply and demand.

Percentage yields vary based on tenors.

TenorYield (%) p.a


Bear in mind that treasury bills are issued by the Federal government at reduced prices and repurchased by the government after they mature, at a full quotation. For instance, an investor can purchase a treasury bill of N300,000 at a discount amount of N200,000 for 364 days.

After the purchase is made the Federal government presents an I Owe You (IOU) of N300,000 to be paid to you after 364 days. At the given period, the government acquires the investment back at its complete price. The bonds have no fixed interest rates and the stop rate is generally determined by the demand and CBN.
But then, if you’ll be putting your money aside for this investment, it is important that you know how to calculate the return on maturity.

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Here is how you can calculate your investment returns

The formula for calculating your upfront payment is Interest (I) = P x T x R / 100
Important symbols

I mean Interest, P means Principal, T means Time or Duration, R means rate.

So, if for instance, you buy N1,000,000 worth of Treasury Bills from a stockbroker online or a bank at 13% which should expectedly be mature in 364 days.

Your calculation will be 1,000,000 x 1 x 13 = 130,000. N130,000 will be your upfront payment while N870,000 will be paid to the apex bank.

This also means that you have really only invested N870,000 and not N1,000,000 since you have already been paid N130,000. Upon maturity, you will receive N1,000,000.


The formula for calculating your yield is R = I x 100/P x T
That’s 130,000 x 100/(870,000 x 1) = 14.9%.

You may decide to reinvest your upfront earnings. But bear in mind that the shorter the maturity date the lesser your interest rate.

Hence, if you’re calculating for a period of 182 tenors, 91 days, or 30 days, the ‘T’ (Time) reflected in the equation becomes either 182/365, 91/365, or 30/365 respectively.


Tenor – This is the permitted duration you have to retain the treasury bill before you receive your money from CBN back. You may also choose to harness the secondary market to sell your investment before the due date of the tenor.

  • Stop rate – This is the highest interest rate given by CBN.
  • Bid rate – This is the amount you choose to pay for T-bills when they are being auctioned.
  • Secondary Market – This is the provided market for the buying and selling of treasury bills.
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Investors who want to invest in treasury bills can buy through any official dealer. However, a bank is always the best place to buy in Nigeria.

After approaching the bank for a treasury bill, the bank will give you a form to fill. On the form, you will provide your information and your bid rate. If you do not have a rate, you can leave it for the bank to decide the appropriate one for you. However, the does not mean the Apex bank will select the bank’s bid rate.

If your bid is rejected, another option is to buy Treasury bills from the secondary market Over The Counter (OTC) through a broker.

Some banks now insert treasury bills mobile applications on their apps making it easier for investors to trade.


There are two common ways to buy treasury bills. You may pick a stockbroking firm or simply use your bank.

But then, if you’d not like to undergo the stress of the bricks and mortar system, you can simply log on to the internet and register on an online stockbroking platform without leaving your home or office.

Most of the stockbroking firms you’ll find will only permit a minimum investment of N100,000. If you’ll be considering any commercial bank, then you’d have to find out their threshold on investments, as it varies from bank to bank.

The stockbroking firm will deduct your investment amount from your account after you have deposited the money there and requested for a maturity date which could be 364 days, 182 days, 52 days, or 30 days. You’ll also receive an upfront interest that would be paid into your bank account.

You’d also likely receive the certificate for the purchase within days, from the stockbroking firm.

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