Treasury bills in Nigeria allow us to grow our money beyond our normal savings account. It is one of the lowest-risk investment opportunities in Nigeria issued by the Federal Government of Nigeria and guaranteed by the Central Bank of Nigeria. Treasury Bill fluctuates based on economic conditions, so sometimes returns can be high and low.
A Treasury Bill is a government-issued debt whereby you lend the government money to get in return for a stipulated period of time.
This article explains everything you should know about Treasury Bills, how it works, their rates, how to buy, banks and apps to buy from, and every other thing you should know.
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What Are Treasury Bills?
Treasury bills, or T-bills, are short-term loans issued by the Central Bank of Nigeria on behalf of the Federal Government. They serve as government IOUs. When you purchase a treasury bill, you are lending money to the government for a particular time period.
In exchange, the government pays you interest. Unlike a bank deposit, you lend directly to the government. T-bills are appealing because they are backed by the full faith and credit of the Federal Government of Nigeria, lowering the risk of losing your principal.
How to Buy Treasury Bills in Nigeria
There are different ways to buy Treasury Bills in Nigeria
Buy through the Bank
Most commercial banks in Nigeria (check below) provide access to Treasury Bill investment. To buy, go to the bank branch or use the mobile app. Also note that banks have their charges and can help you manage your Treasury Bill investment.
Buy through Digital Platforms (App)
Many apps can help you buy Treasury Bills (see them below). They are easy and convenient to use. They also have experts who assist in the technical part of the investment.
Directly through the CBN
Lastly, you can buy a Treasury Bill through the Central Bank of Nigeria. You need a minimum of #50 million to buy from CBN. However, this process is difficult and only open to institutional investors or high-net-worth people.
Top 10 Best Banks for Treasury Bills in Nigeria
1. Zenith Bank
Zenith Bank is one of the most trustworthy institutions for treasury bill investing. It provides both primary market access and secondary market buying. Investors also receive explicit interest rate forecasts before bidding. Zenith is noted for its efficiency and excellent customer service.
2. Access Bank.
Through its extensive branch network, Access Bank facilitates the purchase of treasury bills. Investors can obtain fixed-income investments by filling out treasury bill forms at the bank or through the AccessMore App. Access Bank is popular with ordinary investors due to its various investment possibilities.
3. Guaranty Trust Bank (GTBank)
GTBank is well-known for its flawless operations. Customers can purchase Treasury bills by filling out paperwork at a branch or through the GTWorld App under investments.
GTBank regularly changes treasury bill rates and offers one of the most transparent methods for retail investors.
4. First Bank of Nigeria
As the country’s oldest bank, First Bank has a solid reputation for treasury bill transactions. With a broad branch network, it is easily accessible to both small and major investors. First Bank also handles rollover requests seamlessly, making it an excellent choice for long-term investors.
5. United Bank for Africa (UBA)
UBA is a leading bank in treasury bill sales. Investors can apply through any UBA bank and fund their accounts before the auction. UBA’s widespread African footprint also appeals to expatriate Nigerians wishing to invest in treasury bills back home.
6. Fidelity Bank
Fidelity Bank provides good treasury bill services, particularly to retail investors. Customers can invest as little as ₦100,000 in the secondary market. Customers interested in fixed-income investments can also benefit from the bank’s personalised advising services.
7. Stanbic IBTC Bank
Stanbic IBTC is an important player in the investment market. Beyond treasury bills, it also offers bonds and mutual funds. Investors looking for a variety of financial instruments in addition to T-bills frequently prefer Stanbic IBTC Treasury bills due to their experience and professionalism.
8. Union Bank
This is another reputable source for Treasury bills. It offers treasury bill investments through its branches and has streamlined the process for regular customers. Its basic paperwork and clear instructions make it an excellent choice for beginners.
9. Polaris Bank
Polaris Bank provides treasury bills to both retail and corporate customers. It accepts investments through branches and offers flexible tenors. The bank has improved its digital banking capabilities, making it easier to track investments.
10. EcoBank
This is also a top bank for treasury bills in Nigeria. It allows access to both the CBN auctions and the secondary market. EcoBank customers can manage their T-bill investments with ease and dependability because of its robust digital banking infrastructure.
App to Buy Treasury Bills in Nigeria
- Bamboo
- Chaka
- Cowrywise
- I-Invest
- MeriTrade
- RiseVest
- Trove
- Yochaa
Benefits of Treasury Bills
- Low minimum investments (through platforms): With modern financial technology and investing platforms, it is no longer necessary to invest substantial sums of money in T-bills. Your money is locked in. Once you invest in a T-bill, you cannot access your funds until they mature. While a secondary market exists to sell T-bills early, it is not necessarily efficient or clear.
- Returns: If inflation surpasses your T-bill rate, your real returns may be negative since your money’s purchasing power decreases.
- Opportunity Cost: Money invested in T-bills cannot be used for another purpose. For example, if you buy a 364-day T-bill at 12% and stocks yield 30%, you will miss out on the higher return.
- Tax: Interest on treasury bills is subject to withholding tax, which affects your net earnings.
Factors that Affect Treasury Bill Prices
1. Maturity
A T-bill’s price is strongly influenced by its maturity time. A one-year bill yields more profit than a three-month bill. As a result, investors receive a higher rate of return to compensate for locking up their money for a longer period.
2. Risk
The price of a T-bill is also influenced by investors’ risk appetites. T-bills are less desirable and will be priced lower as the economy grows, while other debt products offer larger returns.
When the markets and the economy are volatile, and other debt assets are seen as riskier, T-bills command a higher price due to their lower risk.
3. Inflation
The current rate of inflation may also affect the cost of T-bills. For example, if the inflation rate was 5% and the T-bill discount rate was 3%, investing in T-bills would be unprofitable since the real rate of return would be negative. As a result, there will be less demand for T-bills, resulting in reduced prices.
Conclusion
Treasury bills in Nigeria are a safe way to grow your money. They offer guaranteed returns, are backed by the government, and are widely available through commercial banks. Whether you use GTBank, Zenith Bank, or Access Bank, the process is straightforward.
For small investors, the secondary market through banks is the easiest entry point. For larger institutions, bidding directly at CBN auctions provides more flexibility.
If you want a low-risk investment in Nigeria that beats savings accounts, treasury bills are one of the best options.
Adepoju Olamilekan is a blogger and student of economics at Adekunle Ajasin who has written for many educational blog across the country. His passion and love for blog and creating as found him always writing to provide solutions to all Nigeria Students