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.
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. If you want proof of your investment, it is best to request this from your bank once the money has left your account. You will need to ask them for a T-bill certificate after payment has been made.
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.
Is the interest of t bill paid monthly or yearly
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.
How do I know the T bills are going on sale?
Hi Alec,
You will need the check the CBN website. See: https://www.cbn.gov.ng/rates/govtsecurities.asp
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
There are fixed terms after which you will be paid – 91 days, 182 days and 364 days. You don’t get paid monthly, you get paid at the end of the term, depending on which term you pick.
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
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
Are there any terms and conditions attached to T.Bills e.g withholding tax etc? If there are, what exactly are they?
Hi Adesanya,
There is no tax on the returns as it is a government security. That would be like you lending the government money and they forcefully take more than you lent them.
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.
Hope investing on treasury bills is not dangerous. Or eat if d federal government fails to pay back
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
If invest 100k what is my interest rates and at end of the month no interest attach to it that’s no business
It does appeal to some people.
Inform me on any update please about the current news on Treasury bills.
Hi Pam,
Please check the CBN website for news: https://www.cbn.gov.ng/rates/govtsecurities.asp
OK
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
So banks can fix their rates if you are buying through them on the secondary market – which is like the secondhand market for T-bills.
This is quite interesting. Must it be in my existing bank or I can visit any bank for Tbills only?
Is there a limit to how much one can invest with in T-Bills?
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?
You don’t get anything, Franklyn. You just collect your agreed returns at the end of the term
Hi Franklyn,
It is best to ask your bank for a certificate after the money has been paid. This is what you can then use to prove your investment.
hellow mr pepe.please sir,I like to invest in treasury bills via gtbank,please how what are the steps to be taken.
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?
Hi Michael, This is a good question. You will need to ask your bank for a certificate or proof of the investment.
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
Thank you for taking your time to educate the readers about this, Joe.
I do appreciate
@ 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.
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.
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
Hi Tony,
I don’t know if you still need this info, but yes you can apply above N10m. Rumour has it that everyone needs to buy through their bank, unless they have N50m. See: http://nairametrics.com/nigeria-launches-fgn-bonds-stops-sale-of-treasury-bills-to-anyone-who-doesnt-have-n50-million/
Thanks!
thanks for the good work. I will like to invest on t-bill.I to understand it more before I take the decision.
Hi Romanus, I think the post is straightforward. Please feel free to ask any questions you have and i’ll try my best to answer.
Please Mr. Pepe I want to know the rate of interest/commission that a bank is entitled to for t-bill with a duration of 364 days. Thanks
Hi Blessing, here are the rates from Zenith bank as at 2 weeks ago:- https://www.zenithbank.com/resources/TreasuryNewsandMarketUpdate.pdf
Thanks
I love tb. It is the best investment for now
What is the minimum amount someone can invest?
Hello Gbenga. You would have to find that out from your bank. Speak with your account manager.
Thanks for the update. Pls I want to ask, how can one reinvest after the maturity period? Say I invest 100,000 in tbills for 91days, but don’t want my capita return.
hello Leo, you can re-invest after maturity..i work with chapel Hill denham, an investment mgt firm..you can reach me on directsales@chapelhilldenham.com…
Hi Ethan, I invest in TBills but fill out a form all the time. Do you know if any bank or if the CBN has an online platform for TB investments. This will make the process more efficient.
I need more enlightment on tb please
Hi Adams, have you got any specific questions not addressed in the post?
Please are treasury bill interest paid at time of purchase or at the maturity of the bill. Is there an option of interest payment at maturity of the bill?
Please when is the next sales coming up
Mr Pepe, awesomely amazing job you doing here. God bless you real good
Thanks and God bless
Please in the form I filled in the bank, there is an option for invest interest which I did, I want to know how much I will get in return, I invested 170,000 naria for 91days at the rate of 13.2%. How do I calcalute the interest?
Good job
This is indeed an eye opener am banking with GT bank please can any one tell me the interest rate for 100000 for 90day I would love to invest. Thanks
Doris
Urgent
Please Mr pepe, what’s the Tbill rate of Zenith Bank a week ago?
plx how do I get to know the time and period to purchase treasury bill and also the current interest rates
is witholding tax payed in T-Bill
this is quite an interesting forum …well done to all
Thanks for the good work. Please I will like to know if fore instance CBN fails to pay you on the due day after your tenor; what or can someone takes legal actions against such laxity?
Thanks for the good work. Please I will like to know if fore instance CBN fails to pay you on the due day after your tenor; what or can someone takes legal actions against such laxity? Thank you
Hello pls when are we expecting this month’s rate to be announced.? And what’s the interest amount of 1m going to be @13%, howmuch will i get on the 1m for the 13% at 90days window..?
What is the difference between bonds and treasury bills?
This is really interesting but Mr pepe isn’t any longer here for the needed responses. Pls come back, I know that some of the questions are repeated and boring but there are still a few twists which need straightening, pls don’t kill the excitement,nigerians need to raise money, hook or crook. Thanks a plenty for this forum.
Hello, pls I need advice on which bank currently offers the best %age for T bills now. How much can I get for an investment of 6M for a 6month window considering what rate is available? Hope pepe is still here to handle issues as I see that no entries has been made here since Dec 8th?
Well, i like this.
Thank you
Good work you’ve done here, keep it going!
Thanks for the heads up, Jide!
hello,if i wanted to ivest 10 million i T bills at a rate of 10% FOR 90 sdays,how much should i expect back in total plus my capital .Thanks
Pls I will like to know the difference between treasury bill and treasury certificate.
please which bank offers the highest interest and how do I invest on TB also what’s the minimum amount for investing
Hi Chukwudi,
I’m afraid you will need to call the banks individually to check their rates. I would recommend calling on a Sunday, as you won’t wait long in the queue.
Great job.
Pls more advice, i want to invest 100,000 in this platform. What will be my gain after 90 days.
Hi Joseph,
You can find current rates here: https://www.cbn.gov.ng/rates/govtsecurities.asp
All Nigerian investment has a twist! From posts above, If one invests 1m for 91 days @10% and make 25k and another 10m to make 250k after all charges, then the TB business is a waste! The actual ROI is not 100k nor 1,000,000 but 25k and 250k respectively after all charge deductions (a paultey 25%) while a whooping 75% is lost to bank charges!
I feel elated being here. Thanks to Sir Ethan.
What is the reliable bank where one can have treasury bill with
Hi, I invested in a treasury bill. It lists the Face Value as N250,000.00 at a Discount Value of N231,806.85 and a rate of 11.4% maturing in six months. I’ve done every calculation imaginable but I still don’t get the 11.4%. Please, what am I missing?
Hello Mr Peppe,
How do I buy treasury bill from primary market instead of secondary market from the bank?
Also, are there particular amount threshold required to buy from primary market as an individual, please help me on this, thank you
Nice job, please what will be my advantage if I should leave my money for 91 days, 182 days and 365 days respectively? The percentages rates and Interest. Thank you.
Hi, how can I lend money with my T-bills certificate?
HI am Amaka, please can one invest in the bill every month? for those who do not earn much as there salary as *200k? what if you want to invest like 50k every month at a certain rate. is it allowed?
What will one do if treasury bills mature and the money is not paid?
How much will be paid to me on 10percent for 1year 200,000 tbill
If i invests 1m for 91 days @10% I’m I going to have 100,000 at the end of the 91days b/c somebody said that the interest will be divided by the 3 months. pls shed more light on this. Thanks
If one invests 100k at an interest rate of 8.25%, how much would he make at maturity
plz my questions are outside this box pardon me plz do you know about pure yield investment a friend told me their interest is 10% per weekly. that’s to say 50k gives you 5k every 10days
If I invest 100k like for 6 months base on the T-Bill terms what will be my ROI?
Pls reply me sir
I thank you for this platform, It is a good things to be inform about what is going on in some one environment, keep the good work on.
Pls if i invest 100000 how much is my interest
Please if I invest #100000 for 91days what is the exact amount I will get as return.
I will like a private discussion with you pls.
I live in Manchester and my mobile is +447960880278
I have specific questions to ask and I can pay if it requires me to pay so long as i get the information I need.
Many thanks
Please I want to invest 1m in TBills. Can you advise me. Thank you.
what is the return for #1m investment in T bill for 90days period thanks
The return on treasury bill appears very small for the duration. Why is this so?
Even if the return on investment isn’t on a monthly basis, it should be something wkrthwhile after the expiration of the duration.
Kindly clarify please