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Debt Securities

How to invest in treasury bills even if you don’t have N50 million

How to invest in treasury bills even if you don’t have N50 million



Treasury, bills, calendar, Central Bank

Nairametrics| The Federal Government in March 2017 increased the minimum amount required to partake in its biweekly treasury bills auction from N10,000 to N50 million. This announcement means, retail investors can no longer participate in the primary market for treasury bills.

In place of treasury bills, the government introduced the FGN Savings bonds, which offers smaller investable sums but unfortunately does not offer the same lucrative yield as the Treasury Bills. The FGN Savings bond also has a longer tenor being that it is two years and three years, compared to treasury bills that has a maximum tenor of 364 days (one year).

FGN Savings, is also a bond and includes risk of being priced lower assuming you wish to invest in the short-term and sell before the tenor expires. Treasury bills are easier and a simpler form of investing, thus its popularity.

We explained the difference between the FGN Savings bond and treasury bills in the article.

With this new directive, most Nigerians without the financial muscle to invest in treasury bills, find themselves in a state of quagmire. But there is a way out.

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How to invest

Fortunately, you can still afford investing in treasury bills if you do not have up to N50 million. This is because Banks have designed products that pool funds from customers, which they can then use to invest in treasury bills.

[Read more: Nigerian Treasury Bills: Learn everything about Tbills]

How it works

  • Banks can pool small sums of money from their customers into a portfolio that is at least more than the minimum required N50 million.
  • Funds are pooled in line with the tenors three months, nine months and one year respectively.
  • The funds once pooled are invested under a collective fund, owned by the banks on behalf of investors in the pool.
  • They then apply to bid for treasury bills through the Central Bank of Nigeria.
  • Interest earned from the fund is shared equally to all fund contributors based on their individual contributions.
  • For example, if you invested N100,000 in a pool that invested in a 364 day treasury bill that pays 18% interest rate, the bank will pay you N18,000 as your gross interest earned. If your friend also invested in that same pool, but invested N2 million, your friend will get N260,000.
  • Banks will typically charge a fee for this service. The amount charged ranges from bank to bank, so you will have to confirm with your bank what the fee is.

[Read Also: How to choose between investing in bond funds, money market funds or savings bonds]

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How do I apply

  • Approach your bank and ask to invest in treasury bills using the pool option
  • They will give you a form and you will fill the amount that you wish to invest.
  • You will also indicate whether you want to buy in the primary or secondary market. They work differently (see explanation below)
  • You will give the bank an authority to debit your account and give the bank fiduciary responsibility invest the fund on your behalf
  • Once done, you submit the form and await a debit alert
  • The next alert you will receive will be a credit alert. If your investment was successful (that is, your pool qualified for subscription via the CBN), you will get an alert of the interest payment. This usually occurs within 3 days of the conclusion of the bid.
  • If your bid was unsuccessful, you will also receive an alert, this time with the full amount invested net any fees or charges from the bank. You will not get interest because your pool’s subscription was unsuccessful.

[Calculate Treasury Bills]

Primary bid

  • Primary bids occur when the bank includes your investment in a pool that is buying treasury bills directly from the CBN.
  • In a primary bid, you buy directly from the CBN via your bank’s pool, for a 91 days, 182 days or 364 days auction.
  • If you decide not to hold to maturity, you can sell your right in the pool to another investor.
  • However, you forfeit interest not earned to your buyer.

Secondary bid

  • You can also invest in treasury bills by buying from the bank or someone in a pool who is not willing to stay through the end of the tenor of an auction.
  • In this bid, you can get between 90 days and 364 days. It can be 60 days, 75 days, 107 days etc. Just whatever is left of the tenor in the pool you bought into.
  • Banks keep records of all buyers, so they are good at working these things out.
  • You can also sell, if you do not want to wait out the investment.

[Read Also: Official: Nigerian Treasury bills calendar for September – November 2019]

Ugo Obi-chukwu "Ugodre" is a chartered accountant with over 16 years experience in financial management, corporate finance and financial analysis. He is also a retail investor and a personal finance advocate with over a decade experience investing in the Nigerian stock market. Ugo is the founder/Publisher of Nairametrics and blogs regularly on the website.



  1. teingo

    May 11, 2017 at 3:02 pm

    I would like to know how interest rates are computed. Assuming one buys for 3 or 6 months tenor, how does the one year interest rate apply? Will it be the same amount for 3, 6, 9 & 12 months temors or the interest for one year has to be pro rated to the number of months?

  2. teingo

    May 11, 2017 at 7:11 pm

    Assuming Treasury bill is bought via secondary mkt will interest be the same?

  3. Anonymous

    May 14, 2017 at 10:40 pm

    Most commercial banks keep customers fund for too long before investing it in T.Bills. The story is that they bid but did not scale through. They earn float income on the funds.


    June 20, 2017 at 12:08 pm

    Honestly I appreciate you works and comments both online and on radio.

  5. Oladele Ebenezer

    June 19, 2018 at 4:59 pm

    what happens to my T-Bills investment if the commercial bank that helped purchased from secondary market collapsed

  6. Anonymous

    July 26, 2019 at 6:29 pm

    can I apply with 100k

    • Alfred Akuki

      July 26, 2019 at 9:37 pm

      Some banks do accept N100,000 as the minimum for their pooling system for Treasury Bills, so, that is a YES!

  7. Bolaji

    October 15, 2019 at 11:16 pm

    If Iinstructed an Investment Manager which is not a commercial bank to invest my money in treasury bill, how can I be sure that the firm truly invest my money in Treasury bill and not something else with high risk?

  8. Okodugha Odion

    December 29, 2019 at 6:22 pm

    Can a #100,000 be used for my investment on T-bill?

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Debt Securities

DMO takes advantage of MPR cut, allots a total of N103.81 billion

Debt Management Office of Nigeria (DMO) has issued a total of N103.81 billion worth of bonds.



President Buhari not to blame for increase in debt – DMO DG

In a swift response to the MPC rate cut, the Debt Management Office of Nigeria (DMO) has issued a total of N103.81 billion worth of bonds, which is about 71.59% of the total amount offered. The allotted amount comprises of N66.97 billion, N25.43billion, N6.81 billion, N4.60 billion respectively, for the 10, 15, 25, and 30-year tenors.

Recall that DMO had earlier announced its offering of the Federal Government bond worth N145 billion. The auctioning of the offer took place on September 23, 2020, and it was oversubscribed by N215.22 billion.

According to recent data by the Debt Management Office, verified by Nairametrics; out of the 78, 71,57,104 total bids for the bonds; 50, 13, 7, and 6 bids were successful.

(READ MORE:Nigerian Treasury Bills plunge to 3.39% per annum)

The average yield fell by 7bps to 7.21%, as the yield at the mid-end of the curve contracted the most 13bps to 7.31%. In the short and long end, yields fell by 1bps and 7bps to 4.16% and 9.57% respectively.

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READ: DMO reacts to alleged N1.08 billion corruption scandal rocking the agency

The bond auctioned was oversubscribed by 2.48 times. Bid to cover ratio was highest on the 30-year bond by 35.64 times, offered at 8.92% per annum. The 6-year, 15-year, 25-year, and 30-year bonds were offered at 6%, 8.52%, 8.9%, and 8.94% as against 6.70%, 9.35%, 9.75%, and 9.90% at the previous auction.

READ: DMO discloses facts about Chinese loans to Nigeria, states terms of the loans

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Analysts expect the relatively quiet trend to persist tomorrow, as the bulk of the attention will be skewed towards the bond auction.

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Debt Securities

United Capital Plc lists N10 billion fixed rate bonds

United Capital Plc has listed its N10bn, 5 Year 12.5% Senior Unsecured Fixed Rate Series I Bonds.



United Capital Asset Management explains mutual funds’ positive performance

Today, September 22, 2020, the Nigerian Stock Exchange (NSE) announced the listing of United Capital Plc’s N10 billion, 5 year senior unsecured fixed-rate series bonds due 2025, with a 12.5% interest.

In a statement made available on the NSE website, and signed by Godstime Iwenekhai, Head, Listings Regulation, the medium-term bond will be issued as part of the N30 billion Debt Issuance Programme.

The subscription for the offer will last for twelve (12) days, as the offer will open on the 4th of May, 2020, and close on the 15th of May, 2020.

READ: UBA Plc H1’2020 results, a true reflection of its rightsizing decision? 

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READ: Some experts are uncertain of what to expect from money markets in H2 2020

Summary of the offer

  • Issuer: United Capital Plc
  • Offer date: 28th of May, 2020
  • Maturity date: 28th of May, 2025.
  • Units of sale: 10,000,000
  • Price: N1000 per units offered
  • Coupon rate: 12.5%

Redemption: Semi-annually, and payable in arrears on 28th November and 28th May of each year, up to and including the Maturity Date.

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READ: Savannah Petroleum secures $5 million initial tranche loan

Note: Senior unsecured bonds are a non-convertible corporate bond, that is not subordinated to any other unsecured indebtedness of the related issuer. Hence, it guarantees bondholders a quick payout in cases of default. While a fixed rate bond is a long-term bond, with an already specified coupon rate (Interest).

United Capital Plc, is a leading African financial and investment banking group, providing bespoke value-added service to its client. The firm was incorporated in Nigeria on March 14, 2004.

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Debt Securities

Nigerian Treasury Bill falls to 3.05% per annum

The DMO sold N2 billion on the 91-day paper and N8.385 billion on the 182-day.



Implications of the new CBN stance on treasury bill sale to individuals, Nigerian Treasury Bills Market Witnessed Bullish Run on High Liquidity Last week

The latest data from the Treasury bill auctions concluded today revealed that Nigeria’s 364-day tenor dropped to 3.05%. On the other hand, Stop rates printed lower for the 91-day tenor at 1.09% and 182-day tenor, which went for 1.5%.

At the Treasury bill auction, the Debt Management Office sold N2 billion on the 91-day paper, N8.385 billion on the 182-day, and N148.361 billion on the 364-day bills.

Ladi Bello, a treasury dealer at Nigeria’s Tier 1 bank in a phone chat interview with Nairametrics, spoke on the just-concluded auction.

“At the Primary Market Auction conducted by the DMO yesterday, N159bn was rolled-over across the standard maturities on offer with demand skewed towards the new 1-Yr paper.

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“Stop rates on the short and mid-tenured maturities closed marginally lower than the preceding auction at 1.09% (↓1bps) and 1.50% (↓5bps) respectively, while the 1-Year paper remained unchanged at 3.05%,” Bello said.

Quick facts: The massive disparity between the subscriptions and the offers recorded suggests investors are willing to earn a negative real return, compared to the higher risk in other assets such as stocks and real estate.

Temitope Busari CFA, a leading investment professional in a note to Nairametrics also spoke on the low-interest rates the Federal Government of Nigeria was borrowing with. She said;

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“Yesterday’s Treasury bills stop rates were not far off from expectation and yields will likely continue southwards in the near to medium term.

“Additionally, we might see increased pressure on the short-end of the curve due to the dearth of instruments in the market versus excess liquidity.

“Technically, it’s more beneficial for the Government to borrow at the current levels to enhance our chances of recovery post-pandemic recession. Anecdotally speaking, the current interest rate regime is deemed punitive for savers, considering inflation is currently at 13.22%.”

(READ MORE: Nigerian Treasury Bills plunge to 3.39% per annum)

Basically, the CBN sells T-bills on a bi-weekly basis to investors and it is one of the safest investments available. Interests are paid upfront, with the principal paid in full upon maturity.

Understanding Treasury Bills: Basically, when the government goes to the financial market to raise money, it can do it by issuing two types of debt instruments – treasury bills and government bonds.

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Treasury bills are issued when the government needs money for a short period, while bonds are issued when it needs debt for more than, say five years. The issuance of treasury bills is also used as a mechanism to control the circulation of funds in the economy.

Treasury bills have a face value of a certain amount, which is what they are actually worth. However, they are sold for less. For example, a bill may be worth N10,000, but you would buy it for N9,600. Every bill has a specified maturity date, which is when you receive the money back.

The government then pays you the full price of the bill (in this case N10,000), giving you the opportunity to earn N400 from your investment. The amount that you earn is considered as the interest, or your payment for lending your money to the government.

The difference between the value of the bill and the amount you pay for it is called the discount rate and is set as a percentage.

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