How to Invest in Nigerian Treasury Bills
Fixed interest rate investments like Treasury bills are better than naked money put in a savings account. Guess what? Banks will use your deposit to increase their bets at the treasury bills primary market – and they will make money that you are willing to borrow.
Spot interest rate slowed down by 10 basis points to 16.04% for one-year treasury bills papers. If N16 million is okay on your N100 million investment in treasury bills, you are on the right path. (You get the interest upfront.)
Many of us don’t like to lose money that we made through personal efforts, but we want more than we have. It is not a crime to want more.
One has to invest to have more without personal efforts. Sending money and a message is a concept that rich people built their wealth upon.
The good news is, there is no wrong time to start. Fixed interest securities investment option like Treasury bills gives you an opportunity to make money without exposing your fund to unnecessary risks.
Here are steps to take to invest in Nigerian Treasury bill
Open an Account: First, open an investment account with your chosen bank, stockbroker, or asset Management Company, such as DLM Asset Management.
You’ll need to complete the necessary KYC (Know Your Customer) documentation.
Deposit Funds: Once your account is set up, deposit the amount you want to invest. Keep in mind that some institutions may have minimum investment requirements.
Many investment firm will onboard new investors will at least a N10,000 initial outlay.
Place a Bid: Treasury bills in Nigeria are auctioned by the CBN. When you place a bid, you’ll specify the amount you want to invest and the rate you’re hoping to get.
Your bid can be “competitive” (meaning you specify the rate) or “non-competitive” (you accept whatever rate is set by the auction).
Wait for Allocation: After the auction, the CBN will allocate T-Bills to bidders. If your bid is accepted, you’ll receive your interest payment upfront, and the T-Bill will be added to your account.
Hold to Maturity or Sell Early: You can hold your T-Bill until it matures, at which point the government will repay your initial investment amount. If you need the funds sooner, you can sell your T-Bill on the secondary market, though this may affect your overall return.
It is important for you to know that the minimum amount you can invest in a Treasury depends on the method of purchase.
Primary market: The minimum investment is ₦50,001,000 Investors can buy T-Bills directly from the Central Bank of Nigeria (CBN) during the primary market auction,.
Secondary market: The minimum investment is ₦100,000 and subsequent investments must be in multiples of ₦10,000 Investors can buy T-Bills through authorised dealers, such as banks, stockbrokers, and discount houses.
Banks: Some banks allow investors to invest as little as ₦1,000,000. These banks pool money from multiple customers to meet or exceed the ₦50 million requirement and then invest on behalf of their customers.
For the latest rates, contact DLM Asset Management. We give real-time information on current T-Bill rates and advise you on the ideal time to invest.
Keep in mind that rates for longer durations, such as the 364-day bill, are usually higher than for shorter terms, such as the 91-day bill.
Investing in T-Bills with an understanding of the prevailing rates can help you maximise your returns while staying aligned with your financial goals.
Access to flexible choices that are suited to your budget may also be obtained by working with asset managers such as DLM Asset Management. GTCO Falls, Investors Exit Position after Earnings Disappoint
