Nigerian Treasury Bills = Low Risk + Safe Return

“Investing is putting out money to be sure of getting more back later at an appropriate rate.” 
― Warren Buffett

Considering the state of the Nigerian economy, investment is an important decision we should consider as we seek to build other sources of income besides our salaries.

Let’s try an exercise:

Take a minute, think deeply and answer this question:

“When you think of investing, what are the first three words that come to mind?”  


For me, the words ‘scary’, ‘intimidating’ and ‘riches’ come to mind, which is why I immerse myself into understanding the basics of investing. Investments is basically making your money work for you.

So let’s dive in. We’ll be talking about investing in Treasury Bills (popularly known as TBills).

When we invest in the Nigerian Treasury Bills, we  are lending to the Federal government. Just like individuals and companies, the federal government also borrows to finance operations and they do so by issuing Treasury Bills for a period of time.


What are Treasury Bills?

T-Bills are short term (maximum of 1 year) debt instruments issued through the Central Bank of Nigeria on behalf of the government to provide short term funding for government. Asides this, the central bank uses it to control and manage the amount of money in our economy.

Where can I purchase T-Bills?

T-Bills are sold in different commercial banks and official agents such as merchant banks or discount houses. They sell to both individuals and corporate organisations.

How long can I invest for?

Don’t forget we said T-Bills are for a short while and so, the three tenors available are 91, 182 and 364 days in the Primary Market. The Secondary Market offers various tenors subject to the available periods.

  • In the Primary Market, the minimum you can invest is 50 Million Naira. Wow!
  • In the Secondary Market, we are investing through banks or discount houses. The minimum investment is #100,000 but this can also vary with banks or discount houses. Asides this, the tenor of investment could be the normal set days above or could vary depending on what the banks and discount houses offer.

Most of us reading this post are only eligible for the Secondary Market, so we’ll just focus on that.


How do I calculate my Interest/Return on Treasury Bills?

The Federal Government issues treasury bills at a discount. The discount price is what we refer as our interest. Also, it is very easy to calculate our return on investment (ROI).

Example 1

Using one of the set tenor by CBN e.g. 91 days (Both in Primary and Secondary Market)

Bisola wants to buy T-Bills worth ₦200,000 through the bank for 91days at 14% discount rate (interest).

14% of ₦200,000 is ₦7,000, so instead of taking the ₦200,000 first and paying her the interest after, the interest/discount is applied up front.

The bank debits her account with ₦193,000 (₦200,000 – ₦7,000) leaving the ₦7,000 (interest) in her account.

On the maturity date (91days after), the original capital sum of ₦200,000 is paid back into her account.

Interest = 200,000 x 91/364 days x 14%

            = ₦7,000


With T-Bills, you have your interest upfront, although charges may apply.

Example 2

Using a varied tenor provided by a bank or discount house e.g. 345 days (In Secondary Market)

T-Bills are issued 91, 182 or 364 days. So lets assume Bisola went to the bank to purchase treasury bills of ₦200,000  for 364 days  at 17% discount rate from a bank. But on getting there, she was told 345 days was available for 17% rate. At this point, she has to decide if she wants to invest or not.

Interest = 200,000 x 345/364 days x 17%

            = ₦32,225.27

The bank debits ₦167,774.73 from Bisola’s account and leaves ₦32,225.27 as her interest. At the maturity date, the sum of #200,000 is paid back into Bisola’s account.


Try and follow the Steps below!

By Happy Economics

Does the interest rate change?

Yes, it does. It changes depending on the state of the economy and also on how the banks have bargained with CBN for the rates. The interest rate could be high or low. It ranges mostly from 10%- 17% but it varies from bank to bank.

Can I re-invest my investment?

The bank or CBN does not re-invest your money automatically. But you can give your bank an instruction to reinvest your money at maturity. Or go ahead and reinvest both the principal(capital) and interest again.

Can I sell treasury bills before it matures?

Yes, it can be sold to the bank if they are willing to purchase it. Some people sell it as a result of the urgent need of fund. But the rate you are selling could be higher or lower depending on the rate in the market.

Are Treasury Bills Safe?

T-Bills investment option is one of the safest forms of investment and it is  backed by the full faith and credit of the Federal Government of Nigeria.

Are Treasury Bills Taxable?

The interest from your T-Bills are not taxable.

Profitable Investment Ideas Concept

This investment is great because it is safe and your interest and money is guaranteed.

I want us to go through the information above carefully and if we have questions or contributions you can always leave it in the comment section below.

Remember: Do your research and select your bank carefully.

Have a great week, and until next time,

Happy Economist.




2 thoughts on “Nigerian Treasury Bills = Low Risk + Safe Return

Add yours

  1. Sir thank you for this wonderful explanations. My questions goes this way:
    1.I want to find out, if in any way after investing in Treasury bill, maturity period the Government or CBN will refuse to pay back investors principle (capital) or even delay the payment.

    2. Sir on details given above, is the investment 110% zero risk, like putting all my savings (capital) into it and not to be worry about it.

    3. Sir, if we have change in government, will it affect the investment (Treasury Bill).

    Sir, thank you.


    1. Hello,

      1. Treasury bills is the safest investment that guarantees your principal back. It is done in such a way that, when you invest, you get your interest upfront and then your principal at the maturity date. Everything has a risk, but then it is very safe in the sense that, government will always find ways to pay back and that’s why its referred to as risk free. Over the years in various countries, the government has not defaulted except a case in Greece.

      2. I won’t say its 110% risk free. But the risk of default by government is very very low (extremely minimal). Banks and other financial institutions invest in this to make returns also. Remember they are investing their customers money and CBN is also there to ensure safety.

      3. A change in government will not affect your Treasury Bills, especially if you have an already existing Tbills running. You will get your principal at the agreed date. However, a change in government resulting to an improved or worse off economy can have an effect on the rates on Tbills, it could go high or low. When the government is in need of money to finance a project for example, they can issue out Tbills through the CBN to finance this and the rate could go high.

      I hope this helps. You can reach me on 09085482183 to further answer your questions.

      Best Regards,


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