Is Treasury Bill In Nigeria A Scam? Facts Findings

Investing in treasury bills in Nigeria is free. However, there’s a need to get acquainted with the workings of the investment scheme.

According to Nairametics, Treasury Bills are government-guaranteed debt instruments issued by CBN on their behalf to finance expenditure. The CBN also uses treasury bills to control the money supply in the economy.

Would you like to put money aside and earn meaningful interest returns in only a few weeks or months? Consider buying treasury bills.

In a few lines to come, we’ll define what a treasury bill is, what it entails, the benefits, and the step-by-step process of how it works. Carefully read through.

What Is Treasury Bill In Nigeria?

Nairametrics defines treasury bills as a government-guaranteed debt instrument issued by CBN on their behalf to finance expenditure. The CBN also uses treasury bills to control the money supply in the economy.

These bills are the most liquid money market securities and are backed by the approval of the Federal Government of a nation. The Federal Government of Nigeria, through the Central Bank of Nigeria, issues Nigerian Treasury Bills to provide short-term funding for government budget deficiency.

How Do Treasury Bills Work In Nigeria?

All treasury bills are short-term investments and mature within a year from their date of issue. You have the option of buying bills with maturity periods of one month, six months or one year. Generally, the longer the maturity period, the more money you will make from your investment.

Treasury bills have a face value of a certain amount, which is what they are actually worth. But they are sold for less. For example, a bill may be worth 100,000, but you would buy it for 90,000 with the 10% interest rate paid upfront.

When the bill matures which normally happens after a period of time, the government then pays you back the full amount you invested which is 100,000 and you earn 10,000 from the 100,000 investment.

The amount that you earn is considered interest. As we go further in this article, we’ll show you how to calculate interest.

Treasury bills are one of the safest forms of investment in the world because they are backed by the nation’s government.

What Are The Benefits Of Investing In Treasury Bill In Nigeria?

Treasury bills are one of the safest investments in Nigeria as it has the full faith and credit of the Federal Government of Nigeria. I’m sure you know what that means.

Here’s a list of the benefits attached to investing in Treasury Bills in Nigeria:

  • Investing in Treasury BIlls provides a good source of income.
  • Treasury Bills is a risk-free investment for people who wish to save.
  • It is tax-free.
  • Treasury Bills are very liquid and can be converted to cash quickly.
  • They can be used as collateral.
  •  The yield or Income on the investment is very competitive with returns on other money market instruments of similar maturities.
  • The securities have zero-default risk.
  • The Treasury Bill can be traded on stock exchange.

Can Individuals Buy Treasury Bills In Nigeria?

Of course, yes!! Any member of the public can invest in the Nigeria Treasury bills; individuals, Corporate Bodies (Private and Public), Institutions (Private and Public), Banks, Discount Houses, and Brokers are not exempted.

Investing in treasury bills is by auction Subscriptions at the market for 91,182, 365, and 730 days.

Treasury Bills are sold through a bi-weekly auction conducted by the CBN. Buyers are requested to quote bids following which the average minimum bid is selected.

What Is The Minimum Amount For Treasury Bill In Nigeria?

The minimum amount for investment according to the Central Bank of Nigeria is 50 million naira — and it is often auctioned every week. Nevertheless, some banks who buy directly from the CBN have the right to sell at a retail rate to retail investors who don’t have up to 50 million nairas to invest.

A good number of these financial institutions and stockbrokers who directly buy from CBN peg the minimum amount at 50,000, 100,000, and some 1 million naira. There are fees for their services which vary according to the financial institution.

How To Buy Treasury Bills In Nigeria

To buy Treasury Bills you will have to approach your bank requesting for a form. You fill the form with your personal information also indicating the amount you want to buy as well has your bid rate.

With the advent of banks’ treasury bills mobile application, you are only required to fill a signup form once.

You can also buy treasury bills in Nigeria via an online stockbroking platform. This can be done online from the comfort of your house/office. However, most stockbroking firms only allow a minimum investment of N100, 000.

SEE ALSO: What To Do With 100k In Nigeria | Best Business Ideas

What Is The Current Rate Of Treasury Bill In Nigeria?

According to the latest data from, below are the yield for treasury bills and their tenor. Please note that this doesn’t indicate future rates (rates could go lower or higher based on demand and supply).

TenorYield (%) p.a

How Are Treasury Bills Interest Calculated In Nigeria?

If you purchase a 100,000 TB with an interest rate of 10%, the CBN debits your account with N90,000 as such your N10,000 interest is paid upfront. Upon maturity, you are paid the face value of 100,000. The upfront payment of your interest makes your true yield actually higher.

To calculate the upfront payment: Interest (I) = P x T x R / 100

P = Principal

T = Time/Duration

R = Rate

That is 100,000 x 1 x 10/100 = 10, 000. This is what you get at the beginning of the investment while N90,000 is remitted to the CBN.

With the 10,000 paid upfront, it means you’re only investing 90,000 technically and not 100,000 since the 10% interest has been remitted already.

To calculate your true yield then: R = I x 100/P x T

10,000 x 100/ (100, 000 x 1) = 10% is the true yield on the investment.

Can Treasury Bill Be Terminated Before Maturity in Nigeria?

If you wish to terminate at maturity you can also do so through the bank or the investment house where the investment was placed. The investment can also be terminated before maturity. However, this is subject to a pre-liquidation charge which only affects the interest payment. Presently 20%.

Is Treasury Bill A Good Investment?

A risk-free investment with interest is certainly a good investment. The central bank issues T bills on behalf of the federal government. It’s like government crowdfunding.

Here the government raises “money” from the public to finance its expenses.

It is a short-term security issued at a discount for a tenor ranging from 91 to 364 days. The profit from the investment is usually paid at the beginning of the transaction according to the interest rate while the full money is repaid at maturity.

Summarily, Treasury bills are one of the safest forms of investment in the world because they are backed by the government and are considered risk-free.

Final Thoughts

What sets investing in treasury bills in Nigeria apart from other investment platforms and schemes goes beyond the interest rate — the authenticity and risk-free nature is king. So, if you are looking for a sure investment you can bank on, investing in treasury bills in Nigeria should top your chart.


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