How Can I BuyTreasury Bills in Nigeria And What is the Benefits

Hello all, please I want to know how I can buy treasury bills in Nigeria? I am trying to know how all this works, it benefits and so many others. Your answers will help me to be better prepared for my decision. Thanks

Active Member Asked on March 22, 2018 in Finance.
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      Let me try to break it down for proper understanding.

      Like individuals and companies, governments occasionally borrow to fund their operations. When government wants to borrow for less than one year, it does so by issuing Treasury Bills (T-Bills).

      Hence, T-Bills are short-term debt instruments issued by a national government through the Central Bank to provide short term funding for the government. In addition to the above, central banks also use T-Bills to control money supply in the economy.

      If you buy T-bills worth of N500,000 at 10 per cent bid rate/interest rate, CBN will debit your account with N450,000, leaving a balance of N50,000.

      This means that your interest of N50,000 has been paid to you upfront.

      When your investment matures, you are still paid your N500,000. This shows that you were actually paid N550,000 for your investment of N500,000

      Here are benefits attached to it:

      – Yield/ income on Treasury Bills is competitive
      – Yield/ income on Treasury Bills is competitive
      – Investment in Government Treasury bills gurantees the protection of your capital
      – Treasury bills are considered to have zero default risk and interest income are tax exempt

      The minimum investment in Nigerian treasury bills has been increased from N10,000 to N50m with effect from March 6, 2017

      If you wish to know anything else, let me know below.

      Expert Consultant Answered on March 25, 2018.
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