A Call Account or Call Deposit is a flexible instrument that allows you save and earn interest while having access to your funds should you be in urgent need of cash.
It is an investment outlet for cash that you do not have an immediate need for but also do not want to tie up in a fixed deposit. Therefore, rather than allow it to remain idle in a non interest bearing account you can transfer it to a call account.
The advantage of a Call therefore is that you can have access to your cash at a very short notice typically one to two days maximum. Due to the flexible nature of a Call Account, interest rates on it is typically low and well below that of a Fixed Deposit and sometimes a Savings Deposit. Call Rates in Nigeria can range from between 2-5%pa depending on the bank and the amount invested.
Idle funds can be placed on overnight call, 7-day call or 14-day call. This means you can place your money in a call account for 7days, 14 days or overnight.
Is it for me
Call deposits are for people who have cash that they wish to put to use anytime soon. It is not for anyone who is looking to invest for the long term and looking for decent returns. By their very nature, Call Deposit earn very low interests and is more suitable for businesses or individuals who are into trading but have high cash turnovers in their bank account. Since they do not always use all the cash in their balance sheet, a call deposit gives them an option to earn money from whatever idle cash they have left in their bank accounts at any time.
This article originally appeared on Nairametrics on September 7, 2013 and has been updated.
DMO debunks misappropriation rumour, clarifies missing N2.2 trillion in 2018 Appropriation Act
The DMO has debunked rumours of misappropriation of a N2.2 trillion debt service provision in the 2018 Appropriation Act.
The Debt Management Office of Nigeria (DMO) has vehemently denied the rumour making the rounds that it was unable to account for the sum of N2.2 trillion allocated to its office in the 2018 Appropriation Act.
The agency in a recent disclosure available on its website described the claims as not only false but extremely misleading.
It is pertinent to note that the rumours became rife, after DMO honoured an invitation by the Public Accounts Committee of the House of Representatives, to explain how it spent the sum of N2.2 trillion provided in the 2018 Act. The DMO appeared before the aforementioned committee on the 26th of February, 2021.
Clarifying the issue, the DMO explained that of the N2.2 trillion provided in the 2018 Act; only the sum of N721, 251,798.00 was appropriated to its agency, while the remaining N2.1 trillion was earmarked for Debt Service. In lieu of this, the DMO emphasized that the appropriated sum of ₦2.2 trillion was not available as the DMO’s total allocation.
What they are saying
Commenting on the issue, a part of the press release reads: ‘’ The DMO wishes to emphasize that the provisions in the Annual Appropriation Acts for Debt Service, including the 2018 Appropriation Act, are dedicated for Debt Service payments only; that is, for the repayment of Principal, Interest and Other Charges for both Domestic and External Debt.
“Indeed, the funds for Debt Service are never released to the DMO for spending, rather, in line with the mandate of the Office of the Accountant-General of the Federation (OAGF), the funds are domiciled with the OAGF, who on the advice of the DMO, effects payments directly to the creditors as at when due. Such creditors include multilateral and bilateral lenders like the World Bank, African Development Bank, Exim Bank of China, investors in Nigeria’s Eurobonds, as well as, investors in securities issued in the domestic market such as FGN Bonds, SUKUK, Green Bonds and Nigerian Treasury Bills.”
It also went further to justify the need for Debt Servicing, emphasizing that: “The general public is invited to note that servicing of the public debt is absolutely necessary to ensure that Nigeria remains credit-worthy and retains or improves on its sovereign rating which ultimately, will support growth and development. It is for this reason as well as transparency purposes, that Debt Service is expressly provided as a line item in the Annual Appropriation Acts.’’
What you should know
- The 2018 Appropriation Act authorized the Federal Government of Nigeria to withdraw a total sum of N9, 120,334,988,225 from the Consolidated Revenue Fund, in a bid to meet expenditure requirement in the 2018 fiscal year.
- A breakdown of the 2018 Act showed that; N3,512,677,902,077 was earmarked for recurrent expenditure, N2,873,400,351,825 (capital expenditure), 2,203,835,365,699 (Debt Service and DMO’s allocation) and N530,421,368,624 (Statutory transfers).
DMO announces March 2021 FGN Savings Bond offer for subscription
The DMO, on behalf of the Federal Government of Nigeria, has offered for subscription, the March 2021 FGN Savings Bond.
The Debt Management Office (DMO), on behalf of the Federal Government of Nigeria has offered for subscription, the March 2021 Federal Government of Nigeria Savings Bond.
This is contained in a notification published on the website of the agency on Monday. According to the notification, the savings bond offer comes in two tranches;
- 2-year FGB Savings Bond due March 10, 2023: 5.181% per annum
- 3-year FGN Savings Bond due March 10, 2024: 6.181% per annum
- Opening Date: March 1, 2021
- Closing Date: March 5, 2021
- Settlement Date: March 10, 2021
- Coupon Payment Dates: June 10, September 10, December, and March 10
- Units of sale: N1,000 per unit subject to a minimum subscription of N5,000 and in multiples of N1,000 thereafter, subject to a maximum subscription of N50 million.
According to the circular, the offer is backed by the full faith and credit of the Federal Government of Nigeria and charged upon the general assets of Nigeria.
Interested investors were however advised to visit their website in order to get the list of stockbroking firms appointed as distribution agents.
What you should know
- Nairametrics had reported the offer for subscription of a similar Savings Bond in February with interest rates of 4.214% and 5.214% per annum for 2 years and 3 years tenor respectively.
- The interest rate for the latest offer is, however higher than the offer announced in February. This could be a move to attract more investors to subscribe to the securities.
- The FGN Savings Bond is an investment product issued through the Debt Management Office (DMO) on behalf of the Federal Government.
- It also qualifies as securities in which trustees can invest under the Trustee Investment Act, and is listed on the Nigerian Stock Exchange.
Nairametrics | Company Earnings
- FY 2020: Africa Prudential posts N1.45 billion Profit After Tax.
Africa Prudential Plc released its […]
- Custodian Investment Plc posts N12.69 billion profit in FY 2020.
- 2020 FY Results: Nestle posts N39.2 billion, as earnings per share prints N49.47
Nestle Nigeria Plc released its audited […]
- 2020 FY: WEMA Bank posts N5.06 billion profit after tax as earnings per share prints at N13.1.
Wema Bank Plc released […]
- 2020 FY: Zenith Bank post N230.6 billion profit after tax
Zenith Bank Plc released its […]