How to Invest in Nigerian Treasury Bills Online? Nigeria Treasury Bills (NTBs) are short term instruments issued by the Nigerian government through the Central Bank of Nigeria (CBN).
They are safe, legit and legal way for government to raise funds to finance projects and manage the economy.
NTBs are backed by government, so there’s almost no risk of losing your money.
For Nigerians, NTBs are good because they provide a safe way to save and grow your money in the short term.
By buying these bills, you are lending money to government and you earn interest.
This makes NTBs a good option for individuals or businesses looking for low risk investments.
NTBs is good for anyone, whether you are a beginner or an experienced investor.
Also for organizations that have excess funds and want to keep it safe and earn returns.
The process is fully regulated by CBN, so everything is transparent and legal.
NTBs is good for growth and stability.
Save, earn and develop Nigeria’s economy stress free.
If you’re interested in this risk free investment option, this guide will teach you everything about how to invest in Nigerian treasury bills online.
We’ll explain the process and give you tips to make more.
Let’s begin!
How to Invest in Nigerian Treasury Bills Online
Investing in Nigerian treasury bills online is simple when you break it down into smaller steps.
Here’s everything you need to know to get started:
What are T-bills?
T-bills are debt instruments issued by the Central Bank of Nigeria on behalf of the government. They are used to borrow money from the public for short term purposes.
T-bills are sold at a discount to their face value. When the maturity period ends, the investor is paid the face value and the difference is the profit.
For example, if you buy a treasury bill with a face value of ₦100,000 at a discount of ₦92,000, you will make ₦8,000 profit at maturity.
Treasury bills have short term durations, in three categories:
- 91 days (3 months)
- 182 days (6 months)
- 364 days (1 year)
Why T-bills?
Here are the reasons why you should invest in t-bills:
- Risk Free Investment: T-bills are backed by the Nigerian government, they are risk free.
- Fixed Returns: The profit you make from T-bills is fixed, you know exactly what you will get at maturity.
- Tax Free: In most cases, the interest earned on t-bills is tax free, you keep all your money.
- Short Term: T-bills have short term options, for anyone who doesn’t want to tie up their money for too long.
Liquidity: You can sell your T-bill in the secondary market if you need your money before the maturity.
RELATED: 5 Best Apps for Paying Bills in Nigeria
How to Buy Nigerian Treasury Bills Online
Follow these simple steps to buy Nigerian treasury bills online:
Step 1: Choose a Platform or Bank
First you need to choose a bank or a trusted investment platform that has online access to treasury bills. Most commercial banks in Nigeria have this service and some digital platforms like Risevest, Cowrywise and Piggyvest also allow you to buy T-bills online.
Step 2: Open an Account
If you don’t have an account with the bank or platform, you’ll need to open one. This will require you to provide your details, a valid ID and proof of address.
Step 3: Fund
Fund your account. The minimum amount you can invest in treasury bills is ₦50,000 though some platforms may have higher or lower limits.
Step 4: Tenor
Choose how long you want to invest. Treasury bills come in three tenors—91 days, 182 days or 364 days. Choose the tenor that suits you.
Step 5: Bid
- Competitive Bid: You specify the yield (interest rate) you want. If the CBN accepts your bid, you’ll get that yield. But there’s no guarantee your bid will be accepted.
- Non-Competitive Bid: You accept whatever yield the CBN sets. Your bid will be accepted automatically.
Most online platforms will do this for you and will place a non-competitive bid on your behalf.
Step 6: Confirm and Invest
Once your bid is successful, you’ll get a confirmation from your bank or platform. Your investment will start earning interest and you can track it online.
Step 7: Get Your Returns
At the end of the tenor, the face value of your treasury bill will be credited into your account. You can withdraw or reinvest in a new T-bill.
How are T-bills Sold?
T-bills are sold in two ways:
- Primary Market
This is the market where T-bills are first issued by the Central Bank of Nigeria. Primary market auctions are held every two weeks. You can participate directly through your bank or indirectly through an investment platform.
Secondary Market
T-bills not available in primary market? Buy from existing investors. Inflate!
RELATED: How to Open A Dollar Account in Nigeria
How much can I invest in Treasury Bills?
Minimum is ₦50,000. Maximum is dependent on the availability of T-bills in the market and your funds.
What Affects T-bill Yields?
T-bill yields can be affected by:
- Inflation: Higher inflation means higher T-bill yields.
- Interest Rates: When interest rates rise, T-bill yields go up.
- Market Demand: If demand is high, yields will go down.
Why Buy T-bills Online
Buying T-bills online has advantages:
- Convenience: You can invest anytime, anywhere, no need to visit a physical bank.
- Accessibility: Digital platforms makes it easy for beginners to access T-bills.
- Speed: Online platforms is fast.
T-bills Risks
T-bills are low risk but there are downsides:
- Low Returns: Compared to riskier investments like stocks, T-bills has lower returns.
- Inflation Risk: If inflation goes up significantly, your returns may lose value.
- Reinvestment Risk: When your T-bill matures, you may not find another T-bill with same yield to reinvest in.
How to Invest in Nigerian Treasury Bills Online
Here’s a guide to help you get the most out of your investment:
- Set Your Goals: What do you want to achieve with your investment? Are you saving for something specific or just preserving your wealth?
- Compare: Choose a platform with good rates, low fees and good customer service.
- Diversify: Don’t put all your money in T-bills. Invest in mutual funds or real estate.
- Reinvest: When your T-bill matures, reinvest the proceeds.
How do online platforms make it easier?
Online platforms have made investing in treasury bills more easier. They have user friendly dashboard, tutorials and automated bidding options. With just a few clicks you can invest and start earning.
Real life example of treasury bill investment
Let’s say you invest ₦100,000 in a 364 day treasury bill with 10% yield. You pay ₦90,000 and get ₦100,000 at the end of the year. Your profit will be ₦10,000 which is both predictable and tax free.
Conclusion
Investing in Nigerian treasury bills is easy and safe. With Piggyvest and Cowrywise you can do it from the comfort of your home with no stress.
Treasury bills is for anyone looking for a low risk investment with guaranteed returns.
Now that you know how to invest in Nigerian treasury bills online, go ahead and take the first step. Open an account on a trusted platform, fund it and start earning today. Don’t wait—make your money work for you.
FAQs
1. What are Nigerian Treasury Bills (NTBs)?
Nigerian Treasury Bills are short term instruments issued by the Central Bank of Nigeria (CBN) on behalf of the federal government. They are used to raise funds for government expenditures and to manage liquidity in the economy. Treasury bills are safe because they are backed by the government.
2. Why should I invest in Treasury Bills?
There are many reasons to invest in Treasury Bills:
- Safety: Treasury Bills are the safest investment because government is guaranteeing them.
- Fixed Returns: You know your profit beforehand since the interest rate is fixed.
- Short-Term Investment: Maturity periods are 91 days, 182 days or 364 days, so it’s perfect for short term planning.
- Liquidity: You can sell Treasury Bills before maturity if you need cash.
3. How do I invest in Treasury Bills online?
Follow these steps to invest in Treasury Bills:
- Open an account with a bank or stockbroker: Choose a bank or a licensed stockbroker that offers Treasury Bill investment.
- Fund your account: Deposit the amount you want to invest.
- Access the online platform: Use the bank’s or stockbroker’s app or website to log in.
- Select Treasury Bills: Go to the Treasury Bills section and choose the bill you want based on the tenor (91, 182 or 364 days).
- Place your bid: Decide how much to invest and submit. Some platforms allow competitive or non-competitive bids.
- Confirm your purchase: Once your bid is successful, your investment will be processed and the Treasury Bill will be credited to your account.
4. What is the minimum amount to invest in Treasury Bills?
Minimum amount to invest in Treasury Bills is usually ₦50,000 but some banks or brokers may allow smaller investments through pooled funds. Check with your bank or investment platform to know their minimum requirement.
5. How do I make money from Treasury Bills?
You make money from Treasury Bills in two ways:
- Discounted Purchase: Treasury Bills are sold at a discount. For example, if you invest ₦100,000, you might pay ₦95,000 upfront. At maturity, you receive ₦100,000 and the ₦5,000 difference is your profit.
- Selling Before Maturity: If you need cash before the bill matures, you can sell it in the secondary market, maybe at a profit.
6. What happens when my Treasury Bill matures?
When your Treasury Bill matures, the full face value is credited to your account. For example, if you bought ₦100,000 bill at ₦95,000, you will get ₦100,000 on maturity date. You can reinvest the funds in a new Treasury Bill or withdraw the money.
RELATED:
