Want a way to put your money to work without buying stocks?
Treasury bills (T-bills) are short-term debt securities issued by the Federal Government of Nigeria to raise funds. Investors buy them at a discount and are paid their full face value at maturity.
Here’s how Treasury bills work, how to invest in them, and what you should understand before buying.
What are Treasury bills in Nigeria?
Treasury bills are short-term government securities issued by the Central Bank of Nigeria (CBN) on behalf of the Federal Government.
They typically come with maturities of 91 days, 182 days, and 364 days.
Unlike investments that pay periodic interest, Nigerian Treasury bills are usually sold below face value. Your profit comes from the difference between what you pay and what you receive when they mature.
Example
Imagine you buy a Treasury bill with a face value of N100,000 for N90,000.
Face value: N100,000
Purchase price: N90,000
Amount received at maturity: N100,000
Gross earnings: N10,000
This is only an example, not a current Treasury bill rate.
Your actual return depends on the purchase price, maturity date, applicable fees, and other relevant factors.
How to buy Treasury bills in Nigeria
are several ways to invest in Nigerian Treasury bills.
1. Through a bank or authorized dealer
Banks and approved financial institutions can help you access Treasury bills.
Contact your bank to confirm its current requirements, available maturities, minimum investment amount, and charges.
2. Through an investment platform
Some licensed investment firms provide access to Treasury bills or products that invest in them.
Before investing, confirm the firm’s regulatory status and make sure you understand whether you are buying Treasury bills directly or investing in a fund that holds them.
3. Through a money market fund
Some money market funds include Treasury bills in their portfolios.
However, buying units in a money market fund is not the same as owning a Treasury bill directly. The fund has its own fees, risks, withdrawal rules, and investment approach.
How much do you need to invest?
The minimum amount depends on the method you use to invest.
Direct participation in Treasury bill auctions may have minimum bid requirements, while banks and investment providers may offer different access options.
Before putting in money, ask your provider:
1. What is the minimum investment?
2. Which Treasury bill maturity is available?
3. What is the purchase price or quoted yield?
4. Are there transaction or custody fees?
5. Can I sell before maturity?
Don’t assume every platform has the same terms.
Are Treasury bills safe?
Treasury bills are generally viewed as relatively low-credit-risk investments because they are backed by the Federal Government.
However, low risk does not mean no risk.
If you sell before maturity, the price may be different from what you originally paid.
Inflation can also reduce the real value of your returns.
And if you invest through an intermediary, you should understand its role, charges, and custody arrangements.
Treasury bills vs savings accounts: What’s the difference?
A savings account is mainly meant for storing money while keeping it easily accessible.
A Treasury bill is an investment with a fixed maturity date.
| Feature | Treasury bills | Savings accounts |
|---|---|---|
| Purpose | Short term investment | Saving and daily banking |
| Return | Based on purchase price and maturity value | Interest depends on account terms |
| Access | May require selling before maturity | Usually easier withdrawals |
| Main consideration | Maturity and investment risk | Interest, fees, and account conditions |
The bottom line
Treasury bills provide a way to invest in short-term Nigerian government securities without directly buying company shares.
Before investing, understand the maturity period, purchase price, expected return, minimum investment, and the conditions for early access to your money.
Most importantly, make sure you verify the institution handling your investment.
Note: This article is for general financial education only and does not amount to personalized investment advice. Treasury bill yields and investment requirements can change.
Click here to know the difference between savings and investing