Treasury Bills In Nigeria 2020: Understanding How It Works

Treasury bills in Nigeria is one of best ways to save some income, it is one of forms of investment aside from having a fixed deposit account which has a poor interest rate.

This is actually a short term investment, which have a tenor of three month, six month and one year.

Treasury bills are short term investment securities issued by governments to finance national borrowing requirements.

Most people complain that the fixed deposit interest rate is way too small, especially what the banks and non bank financial institution are offering, then treasury bills can be an alternative to it.

What is Treasury Bill

Treasury bills in Nigeria

Treasury bills or T-bills is a short term financial instrument, issued by the government or the central bank with a maturity periods which is usually three months to one year.

When an investor buys a Treasury Bill, they are lending money to the government.

Unlike the fixed deposit, treasury bills areaa discount instruments and they are so called because the investor gets its interest upfront.

For some people, when they hear about the treasury bills in Nigeria, they usually think it’s an investment that requires a huge sum of money. But the answer is no, with one hundred thousand naira, you can invest in the the Nigerian treasury bills today.

The best part is that you can buy directly from banks, just walk into any bank that you’re comfortable with and request for the form.

Going to the bank to invest in treasury bills in Nigeria doesn’t require you to have an account with the bank, works similar to fixed deposit account.

In Nigeria, the government issue the treasury bills through the central bank of Nigeria, and you can easily buy one from the commercial bank.

I’ve seen a certain number of people asking if one can make a long investment in the nigeria treasury bills, but the answer is no.

T-bills is actually a discountable instruments used by the Central Bank of Nigeria (CBN) to manage liquidity in the system, usually on short-term basis.

You can’t make a long investment on the T-bills or even automatically rollover, one you stated the amount and the duration you want, that’s final.

But i want you to know that interest with principal can be re-invested immediately after the end of the agreed tenure.

Features of T-bills

Before going further into the topic treasury bills in Nigeria, it is good to take a look at the features, what it offers to the society.

  1. The Nigerian treasury bills are issued on discount by the government, through the central bank.
  2. The minimum requirement as at 2019 or i will say 2020 is N100,000 with a duration of three months to one year.
  3. The repayment of the bill is made at par on the maturity of the term.
  4. Anybody can invest in the treasury bills in Nigeria, be it individuals, firms, companies etc.
  5. The day count is 364 days, in a year, for treasury bills.
  6. It is a negotiable instrument, you can negotiate the interest rate, the duration and the amount which you are willing to invest.
  7. Thanks to technology and modern banking era, you can buy the Nigeria treasury bills through mobile app other than heading to the financial institution.

Tenors of the T-bills

Like i said before, there are three tenors or duration that an investor can invest in the treasury bills in Nigeria, they are;

91 Days: This is the least tenor or duration that you can invest in the T-bills, you can say it is just a three months investment. On this very tenor, the interest rate may be lower compared to other tenors.

182 Days: The second tenure or duration that you can get on the treasury bills in Nigeria. This is one of the common or popular duration that investors do go for, usually have a good amount of interest rate especially when you’re buying from investment bankers.

364 Days: The 364 days is the longest period that you can invest, actually a duration of one year.

This is my preferred tenors if i’m not in dire need of money i’m investing cause it yield higher percentage on interest, you can even get as high as 16% on five hundred thousand naira invested on the Nigerian treasury bills.

T bills are among the safest possible investments to hold, and the principal value of their investments is preserved if held to maturity.

How treasury bills in Nigeria works


Having known what T-bills is all about, including the features and the tenors (tenures), next is to understand how do treasury bills works especially here in Nigeria.

Is sad that many Nigerians don’t know about investing in the T-bills, maybe because of the financial institutions we have don’t really create awareness and only focus on the ones that they will get profit like the savings and current account or the fixed deposit account too.

Even some number of individuals that knows about it gives the excuse of how can they give the federal government their money when the government is not doing anything for them or the country in general.

This shouldn’t be a reason why you wouldn’t want to try and invest in T-bills, especially in this hard economy.

You can imagine investing N500,000 for a duration of six month, and gets N90,000 on maturity.

I always prefer the treasury bills than the fixed deposit which has a very poor interest rate offered to us by the banks we have.

In as much that it was said that the central bank directed banks and other financial institutions to stop the sale of T-bills to individuals and small firms, banks and non bank financial institutions still sale treasury bills to individuals and small business owners.

Treasury bills are sold by auctions, conducted by the central bank of Nigeria and investors are requested to quote bids following which the average minimum bid is selected.

Right now in 2019, the least minimum amount to buy or invest in treasury bills in Nigeria is N50,000,000 if you’re buying directly from the CBN. But financial institutions that invested in it like banks, will resale it at the rate of N100,000 to small firms and individuals.

There are banks that can sale the treasury bills to you at the rate of N50,000. Since it is negotiable, you can negotiate the amount that you want to invest but it must meet their requirement.

It is sold on Wednesday or i will say biweekly, immediately it is announced by the central bank of Nigeria.

For you to get the latest update on when the treasury bills in Nigeria is sold, i will advise you to endeavour to bookmark this page as i will continue to update it with new auctions.

However you can also check out the Central bank of Nigeria website, which is the main koko of where to get the latest information on the T-bills as well.

But if you know any investment banker or even the bank that you’re investing with, you can request that they keep you updated with new auctions.

How to buy treasury bills in Nigeria

Looking for how to buy treasury bills in Nigeria? I will recommend to go the bank, or maybe go for a stock broker.

But Note That T-bills can be bought from the primary and secondary market respectively.

In the Primary Market, you’re buying from the central bank of Nigeria directly and which is biweekly usually on Wednesdays. The least minimum amount is fifty million naira (N50,000,000).

In the Secondary Market, you’re buying from the bank or other financial institutions like the stock brokers. They usually offer a least minimum amount of N50,000, N100,000 or even N1,000,000 to individuals or small business owners.

There are vast number of online stock brokers, as i haven’t tried any of them, i can’t just say any on this blog post. For me, it is good to go to the bank and request that you want to invest in the Nigeria treasury bills.

Again note that there’s no auction dates on the secondary market, you can walk into any bank any working day and request for it.

Since you’ve know the meaning, knows where to buy it from and how it works which is investing a sum amount of money for a duration of three months to one year, next is the interest rate and how to calculate it.

Treasury bills rate and how to calculate it

Treasury bills interest rate in Nigeria: You can say the interest rate or also call it stop rate is the bid rate you will receive for the amount you wish to invest.

When buying from primary market which is directly from the central bank itself, you’re to make a bid, and also others will make their bid. For example you made a bid of 20% and others made 15, 13 or 12 percent respectively.

Then the Central Bank selects bids that are below the marginal rate which is the minimum average rate of submissions made in a bid window. It maybe 12%, and with this, your bid automatically is rejected cause it is above the marginal rate.

But when an auction is announced, and you bid 10%, at the end of the day the central bank announced that the minimum average rate is 12%, your bid is accepted cause it falls below the marginal rate.

This is one feature of the treasury bills that i don’t really fancy at all, cancelation of bid because it falls higher than the minimum average rate in a bid window.

You don’t need to be a sherlock when making a bid in the primary market, no matter the amount you’re going to invest. Investors will be making a reasonable percentage of bid, and you as a sherlock will make a high percentage.

However, at the end of a bid window, the central bank will look at the number of bids made, draw their line on the percentage that they can offer and accept those that falls within the range.

You that out of sherlock bidded higher, will automatically be cancelled or rejected.

You’ve to wait for another auction to bid again. That is why it is good to be reasonable enough when bidding notwithstanding the amount you want to invest cause at the end it is so painful that a bid is rejected.

Buying from the secondary market which is made up of the bank, stock brokers, investment bankers etc, the set their interest rate on treasury bills.

For example you request from your bank that you want to invest in the treasury bills, they will tell you that this is actually their interest rate for a stipulated time. The only thing you can do is to negotiate with them and that’s all.

The actually bought their from the primary market just like the stock brokers and other non bank financial institution, and the primary market is the central bank, they can sale it at any given rate.

On the secondary market, there’s nothing like bidding, you only negotiate and it is left for them to accept or reject your offer.

How to calculate treasury bills in Nigeria: There’s a formula to calculate your return investment which  I = P × T × R/100

I = Interest

P = Principal

T = Time/Tenor/Duration

R = Rate

For example, you want to invest 500,000 for one year, with an interest of 15%. Your return investment will be;

500,000 × 1 × 15/100 = 75,000

With this, N75,000 is your return investment which will be paid to you, with the actual money that will be deducted from your account is N425,000.

How i got the N425,000 is by deducting 75000 from the 500,000. In order to get the true yield given to you, what we will do is to use this formula; Rate = (Interest × 100)/ (Principal x Time).

Here’s the calculation below;

75000 × 100 ÷ 425000 × 1 = 17.64%

So if you hold for one year ur effective yield is N88200 for investing N500,000 for one year.

If you’re planning on going for treasury bills in Nigeria, i will recommend that you make it for a duration of one year, it has more interest rate and true yield compared to others.

Don’t miss the treasury bills rate in Nigeria 2020 so far

I know banks like First bank, UBA, Gtbank, Stanbic IBTC bank, Sterling bank and others do offer sell treasury bills to the public.

I haven’t tried other sources like the stock brokers or merchant banks but if you have done so, i will be pleased to tell me how to buy from them through the comment box.

Don’t Miss!!! 

Fixed deposit rates in nigeria for all banks

Learn more on how to use a certificate of deposit for income savings

The best banks in Nigeria to open a bank account today

All the bank charges in Nigeria approved by the central bank

We’re just few days ahead of 2020 and i promise to keep you posted with the latest auctions coming up next year.

This is where i round it up on treasury bills in Nigeria 2020, and i know that you’ve at least have some amount of knowledge on what it is, i’m open to your questions and mind you will be happy to add more to this thanks.

34 thoughts on “Treasury Bills In Nigeria 2020: Understanding How It Works”

  1. Hi! Thanks so much for your posts they’ve been really helping me with researching the best course of action to take when investing in Nigeria. I’ve really come a long way. Anyway I had a question as I’m very new to the investing world I’m a bit confused on the return of investment calculations. My question is so what is the total amount of money you would walk away with after tbill of the 500k with 11% interest matures? Is it 500k + the 88k? Also do you have any insight in to the taxation of tbills? And how about mutual funds? Which do you suggest tbills or mutual funds or bjoth?

  2. Oyinola, the bank will deduct the money invested, and at maturity you’ll be paid both the interest rate, and the money you invested.

    It is like you’re lending cash to the bank or the federal government.

    That is, the federal government is borrowing money from you, and when the due date reaches, they will pay you the money the borrowed from you, and the interest rate that mounted on the money.

    There’s no tax fee on T-bills, and if you have the income or the cash, you can go for both T-bills and mutual funds. Right now, stanbic offers the best on mutual funds though i’m yet to try it.

  3. Thanks for your write up.

    In your write up, you suggested going for 1 year investment in T-bills, because of the higher interest rate. For instance, going by your calculations,

    if 15% interest rate is given at 182 days (6 Months) – half a year:

    money realized at the end of a year
    = 6 Months + 6 Months =
    88200 + 88200 = 176,400.

    But, if same amount is invested for 1 year (for instance at same rate),

    money realized at the end of a year is N88200.

    Base, on the above don’t you think, the 6 months (or 182 days) is advisable?


    • Victor what you have to realize is that there’s no way the interest rate of six months and one year will be the same, it can never be the same.

      CBN or banks or non bank financial institution may offer 15% for six months, and 20% for one year. The interest accrued on each month for an investor investing for one year, will be bigger than the one investing for six months.

  4. Please can you explain more on this. When investing in Tbills for a period of one year, how do you get your interest. Is it upfront or at the end of the year?.

    • You didn’t read this post cause you would have come across this “treasury bills areaa discount instruments and they are so called because the investor gets its interest upfront”.

    • The bank can choose to give you another interest on the interest accrued, plus the principal. Though usually banks compound interest for those investing in six or one year.

  5. Can the treasury bill interest rate on treasury bill which is given to an individual from a bank be smaller than the one given from central bank..and if yes why?

    • Yes of course, the central bank is the primary market which requires a least minimum of 25 to 50 million naira, and which the bank(secondary market) buys from them. How do you expect someone that bought a T-bills of 50 million naira to have the same interest rate with someone that bought it for N100,000!!!

  6. Hello Missy Banker, thanks so much for the detailed information, it is very helpful. Is this a good time to invest in treasury bill… what do you think will be the return should i invest 5m for 6months and a year respectively. Thanks. I have been having issues with the calculations.

    • Hello Miriam nice to see you. At this moment or period, T-bills rates are not fantastic but you can still go ahead to invest. With the said amount, the likes of stanbic, fcmb, first bank, or gtbank might offer 5% interest rate for six months.

      Again i want you to know that getting to know your return investment involves the interest rate offered to you. If you actually go to any financial institution to invest in T-bills, they will give you their rates and if it’s OK by you, you can ask them to assist you with the calculation.

  7. Thanks for sharing your profound view on Tbills. In my opinion, it appears Tbills and similar financial securities like fixed deposits are for those who are quite risk averse. Or what do you think?

    In mean in my case for example, I recently invested 100k for a 180 days tenor, through an intermediary investment firm with 8.5 prevailing rate.
    Being that I am relatively new to investing, doing my calculation, i found out that the opportunity cost of investing that amount is quite high eventually.

    Peradventure If am not risk averse, deploying that amount into a small trade for example (reselling gadgets) has high potential of multiplying that amount. I am just thinking like an economist enthusiast you know.

    I would like to know your opinion on this. Thanks

    • What do you mean by reselling gadgets, you mean selling of used gadgets?. Moshood i’m into selling of gadgets as well, through mini importation.

      Well the truth is it gives a good amount of profit but if you have enough customers and sales.

      However, if you really want a high returns on investment, then i will advise you to invest in land/estate investment though it requires a good capital.

  8. I am excited about your response to questions and I really want you to give me advice. I plan to commit money into buying land in Ogun state perhaps the lock down is eating into the money and I thought of investing the remaining money into fixed deposit or Tbill. What do I do Missy banker?

    • It’s a nice idea to fix the money, but i want you to know that fixed deposit rates are quite poor or low at the moment, and some banks have suspended T-bills because the primary market isn’t selling at the moment.

      In order to save your money, you can still invest in T-bills, fixed deposit, go for high yield savings accounts or invest in mutual funds.

      But since you planned to buy the land after the lockdown or coronavirus, i will advise you to go for mutual funds or high yield savings accounts.

  9. Good Afternoon Ma, pls can you suggest any available high yield savings account at the moment for anyone to invest in?

  10. or any available mutual fund to invest in at the moment. Also which bank has the best interest rate in terms of investing in treasury bills at the moment?

  11. thank you Ma, but as a secondary investor do i have to wait until then before i make any move or better still pls what do i have to do to be better prepared to take advantage of investing on TB by this date? And could you pls recommend the best commercial bank to invest in TB or the best stock brokers to use? Thanks alot Ma, as your advice will really go a long way. Appreaciate

  12. Thank you so much Ma for all your answers here. They have all been very handy. but pls i still have one more question which commercial bank would you recommend as best to go for if one is trying to invest in TB or which stockbroker would you recommend I go to should I want to invest in TB today. thanks


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