How to invest in treasury bills (T-Bills) in Nigeria


What is a treasury bill?

A Treasury bill (or T-Bill) is a short-term government debt security, which yields no interest. Rather, it is issued at a discount on the redemption price.

Basically, the Federal Government issues treasury bills at discounted prices for maturity periods between 91 and 364 days. At the end the selected maturity period, the government buys the bills back at full price. For example, let’s say you buy a 182-day ₦200,000 treasury bill at a discounted rate of ₦180,000. The Federal Government of Nigeria writes an IOU for ₦200,000 and agrees to pay back in 182 days.  You don’t get any monthly interest payments,  rather you make your money back when the bond is purchased back from you at full price. In this case the T-Bill pays 11% interest rate (₦20,000/₦180,000 = 11%) over the 182-day period.

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You will not get any e-mail alerts of notifications until the end of your tenure, so don’t expect any – just be patient. You only get a debit notification when the money is taken out of your account, and a credit notification when the money is returned at the end of the tenure.

Where can I purchase T-Bills?

T-Bills are sold via commercial banks and official agents such as merchant banks, and sales are open to individuals and corporate investors.

Is there a minimum purchase amount for T-Bills?

It depends on the bank. Some banks offer a minimum of ₦50,000, while some offer a minimum of ₦500,000.

How long can I invest for?

There are 3 tenures available: 91 days, 182 days or 364 days.

How can I buy T-Bills?

First, you will need to complete an application form issued by your bank or an approved discount house such as Kakawa Discount House Ltd. You will need to submit your application early, as most banks are required to submit applications received by the Wednesday before the dates announced by CBN – which you can get on the CBN website or in the dailies. Alternatively,  your bank might be able to provide you with notifications ahead of time.

When completing the application form, you will be requested for a discount rate – which is the percentage by which the face value of the bill is discounted by. Current rates in Nigeria are around the 12% – 14% mark. You can request for this rate to either be set by your bank, or specified by you (under the “stop rate” section of the application form). If  you do however choose to specify a rate which is significantly higher than what the CBN is prepared to offer, your bid will fail.

Various banks will offer you various stop rates/discount rates, depending on how much you want to invest and how long you want to invest it for so it is a good idea to shop around and not go with the first offer you receive. Do your research and select a bank carefully as people have reported banks offering as low as a 2.4% discount rate. As at October 2015, unverified informal accounts suggest that Firstbank seems to have the best bid rate for a 91 day tenure at 9.5%.

How do I calculate the return on my investment on T-Bills?

It is very easy to calculate the returns on your investment, and how this is paid. If for example you purchase T-Bills worth ₦100,000 at a 10% discount rate, CBN only debits your account of ₦90,000. At the end of the maturity period, you are paid your face value sum of ₦100,000.

Can I sell my T-bills before it matures?

It is possible to sell your T-Bills before it maturity using the OTC market. Because this is governed by the forces of demand and supply, you might make a loss if you choose to sell them before their maturity date.

How secure are T-Bills?

As T-Bills are based full faith of the Federal Government of Nigeria, they are considered one of the most secure investments to make. They can also be used as collateral, and are accepted by all banks.

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  • Is the interest of t bill paid monthly or yearly

    Eze frank November 2, 2015 5:29 pm
    • You don’t get interest as you would get with a bank. You just get the full value of the bill you purchased at a discounted price.

      mrpepe November 2, 2015 6:06 pm
  • How do I know the T bills are going on sale?

    Alec March 25, 2016 4:57 pm
  • How do they calculate returns on t.bills.. Is it monthly or yearly..e.g i buy t.bills of #100000 wit 10% interest.will the 10000 interest be paid everymonth or jst once in a year.thank u.reply quick pls

    Okorhi godswill March 30, 2016 11:51 am
  • How do they calculate returns on t.bills.. Is it monthly or yearly..e.g i buy t.bills of #100000 wit 10% interest.will the 10000 interest be paid everymonth or jst once in a year.thank u.reply quick pls,pls teach me pls

    Okorhi godswill March 30, 2016 11:52 am
  • Someone explained Treasury Bill with this example, which ia different from your anaysis here sir, kindly throw more light sir.
    SHORT TERM T.BILLS FOR 91days @ 5.99%
    Invested 1milllion naira @ 91days for 5.99%
    Discounted payment = 940,100
    To get true yield= 1m-940,100/940,100 * 100
    = 59,900/940,100 * 100 ; = 6.37%
    True yield = 6.37%
    Your interest would be 1m * 6.37%
    = #63,716(per annum)
    To get 90days
    #63,716/365days (to get for 1day)
    = #174.65naira(per day)
    90days = 174.65 *90 = #15,893naira

    Tunde April 3, 2016 4:24 pm
  • Are there any terms and conditions attached to T.Bills e.g withholding tax etc? If there are, what exactly are they?

    Adesanya Adebiyi May 30, 2016 7:55 pm
  • I must thank you for this great work your doing #kudos to you. Will like to share with you platforms where one can invest and get steady stream of income while their Capital is well preserved. will email more on it. My name is Kingsley a Financial Advisor as well.

    Nwadike Kingsley August 6, 2016 2:05 pm
  • Hope investing on treasury bills is not dangerous. Or eat if d federal government fails to pay back

    Ilesanmi September 4, 2016 5:51 pm
    • No, in most countries treasury bills are 100% safe. It’s best to invest the smallest amount you can to test and see how it works. All the best

      mrpepe September 5, 2016 11:49 am
  • If invest 100k what is my interest rates and at end of the month no interest attach to it that’s no business

    Oteta Godwin September 9, 2016 2:34 pm
  • Inform me on any update please about the current news on Treasury bills.

    Pam David Dango September 19, 2016 5:44 am
  • OK

    Tony October 1, 2016 12:46 pm
  • in your write up sir, it seems the bank has the power to fix discount rates. before now I thought such power rest in Fgn through DMO… how do you explain this

    Ndolo onyedikachi October 7, 2016 6:08 pm
  • This is quite interesting. Must it be in my existing bank or I can visit any bank for Tbills only?

    Rose November 6, 2016 4:20 pm
  • Is there a limit to how much one can invest with in T-Bills?

    Adibuah January 3, 2017 1:59 pm
  • Good day Mr Pepe, thanks for this platform. I invested in T-bills sometimes in October last year via my bank (GTB). I want to find out, am I supposed to get any certificate, or receipt, apart from the debit notification on my account, to show my investment?

    Phranklyn January 6, 2017 10:11 pm
    • You don’t get anything, Franklyn. You just collect your agreed returns at the end of the term

      Ethan Okoli January 7, 2017 9:46 am
  • hellow mr pepe.please sir,I like to invest in treasury bills via gtbank,please how what are the steps to be taken.

    david January 14, 2017 3:33 pm
  • Good day MrPepe, thanks for this good work but i want to know if no document or certificate is issued in T bills, how then can i use it as collateral for loan if there is nothing to show for the investment made with the Government?

    Ejeh Michael January 16, 2017 9:34 am
  • Goodday MrPepe. Thanks for this article but i want to state that i doubt if treasury bill could be used as a collateral for loans. I did a 91days Tbill of 3.8million with Fidelity bank in Dec 2016 which will mature by march 2017. When i had an emmergency and needed a token of 150k, fidelity bank could not grant me the 1month loan despite my TBill maturing a month away. The reason being that i am not a salary earner but a business person. So i want to state that Tbills could not be used as a bank collateral from a personal experience. thanks

    JOE February 3, 2017 4:28 am
    • Thank you for taking your time to educate the readers about this, Joe.

      I do appreciate

      Ethan Okoli February 11, 2017 10:27 am
  • @ Ejeh Michael. once your Tbill is successful, you will get an email notification of your successful Tbill bid details. It is required of you to ask or request for the certificate/statement from your bank. It is the detailed statement of your successful Tbill that is called Tbill certificate. But i was denied a loan with it at fidelity bank because i was not a salary earner but a business man. So don’t expect to get a loan with Tbill certificate.

    JOE February 3, 2017 4:39 am
  • Please I want to know. If I’m to apply for treasury bill, how should I fix the rate. Should I depend on my bank to do that for me or should I fix the rate based on the previous rates. Again. It is possible to apply for treasury bill of 91 days with the same bank for four times a year. I need immediate response.

    Tony March 5, 2017 1:25 am
  • Please Mr pepe is there any restrictions or range on the amount someone can invest in a treasury bill. Can someone apply for treasury bill above 10million. Please I need a quick response. Thank you

    Tony March 5, 2017 10:16 am
  • Thanks!

    Lola March 19, 2017 1:54 pm

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