Before now the retail investors in Nigeria who wanted to invest in risk free short-term dated interested yielding securities could only invest in treasury bills. However, earlier this year the Federal Government introduced the FGN Savings Bond as an alternative security to fixed income loving retail investors.
But unlike treasury bills, the FGN Savings bonds is longer in tenor and offers different investing propositions. In this article, we will attempt to differentiate between the two forms of investing, helping you decide what is good for you based on your investment appetite.
Before we get to the differences, they do have common benefits and characteristics, which are listed below:
- No fees or charges for subscriptions or bids
- Both are listed on The Nigerian Stock Exchange and can be sold before maturity by investors through the secondary market
- They are backed by the full faith and credit of the Federal Government of Nigeria
- Interest income is exempted from tax
- They can be used as collateral for loans
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The major differences that stick out between the both of them are highlighted below
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For those looking to invest in treasury bills but do not have the N50 million minim sum required, there are alternative ways of going around this limitation. We explained it in this article. How to invest in treasury bills if you don’t have N50 million