The FGN Savings Bond: An Investment Option For All Income Groups

Yesterday is always the best time to invest, but luckily we still have today. We have to start our investment today because delaying is leaving money on the table.

Once we’ve figured out the basic rules of investing, our next step is to start exploring the various investment options we have, pick the one that best suits us and I am certain we would get it right.

“How many millionaires do you know who have become wealthy by investing in savings accounts?”  

-Robert G Allen       

I am sure many of us are now familiar with the Nigerian Treasury Bills, so let’s explore all there is to know about the Federal Government Savings Bonds – a new retail investment option launched by the Debt Management Office of Nigeria.

The exciting thing about this investment option is that it is accessible to all income groups, and as low as #5,000 can be invested in it. 


 What is a Bond?

A bond is a debt instrument issued with the purpose of raising capital by borrowing.

How it works

  • It can be short (1-3 yrs.), medium (4- 10yrs) or long term (>10yrs).
  • The borrower (e.g government) agrees to pay interest periodically and capital (principal) at maturity.
  • Bonds are usually issued to finance budget deficits, fund specific projects or recapitalize an entity.

What are FGN bonds?

We should note the difference between the FGN Bonds and the FGN Savings Bonds. FGN Bonds are also debt securities (liabilities) of the Federal Government of Nigeria (FGN), usually issued by the Debt Management Office (DMO). They’re simply a way of lending with interest to the Federal Government but minimum amount that can be invested is  #50 million.

What is FGN Savings Bond?

These are long-term debt securities issued by the Federal Government of Nigeria through the Debt Management Office (DMO), used to support government spending.  The bond is tailored and targeted at retail investors and includes a guaranteed interest payment and repayment of the principal(capital).

The Debt Management Office (DMO) Nigeria is a government agency established to centrally coordinate the management of Nigeria’s debt.

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Where can I purchase FGN Savings Bonds?

You can buy it from any of the approved registered stockbrokers. Here is a list of the accredited stockbrokers. You can always visit them to make inquiries while some stockbrokers have their forms online.

How much can I invest?

The minimum amount we can invest is #5,000 and the maximum is #50 million. However, the amount we are investing must be in multiplies of #1,000, that is, we cannot invest #7,500 or #9,100. We have to invest #7,000, #13,000, #30, 000 etc. (in multiplies of #1,000).

How long can I invest for?

We can either invest in an FGN savings bond with a duration of two years or of three years (2-3 years).

What is the Interest Rate?

The interest rates are determined by the Debt Management Office. They decide what rates they are willing to pay.

How will the interest and principal be paid?

The interest  would be paid quarterly to investors’ bank accounts while the principal (capital) will be paid at maturity ( at the end of the tenor, 2 or 3 years) depending on what duration we picked.



What is the Range of Interest?

The interest range is between 12% – 15% Per Annum. The interest rate also varies monthly, it is based on what the DMO declares.

Let’s assume the interest rate for June 2017 was 13.4% p. a, this would be divided across the quarters in the year. Remember I said the interest rate is paid quarterly.

Can I buy even more within a tenor?

Yes, you can always purchase more provided it is in multiples of #1,000 and not exceeding the maximum amount of #50 million.

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What if I decide to sell before maturity?

Just like the Treasury Bills, FGN Savings Bond can also be sold before maturity if we are in need of funds.

Example: If Bisola buys the FGN Savings Bonds August 26, 2017 and decides to sell it January 26, 2018 because she cannot wait till August 2019 (after two years) to get her principal, she would only be entitled to the interest earned between August 26, 2017 and January 26, 2018. During this transaction, Bisola might:

  • Pay a transaction fee
  • The price at which she sells the bond might be high or low depending on the market value(that is the forces of demand and supply).

Market Value is  highest estimated price that a buyer would pay and a seller would accept for an item in a market

When did the government start selling FGN Savings Bonds?

This investment option is new. The Federal Government through the Debt Management Office started selling FGN Bonds on Monday, 13th of March 2017.


Why is the government issuing FGN Savings Bonds?

The government started this investment option to give every Nigerian of all income group  an opportunity to save and invest, thereby earning income. With this, our savings culture would be more improved.

How is it issued?

The FGN Savings Bond will be issued monthly. Interested parties (the individuals and small savers) have five working days to buy the bond via their stockbrokers from the date of announcement.

Are FGN Savings Bonds Safe?

FGN Savings Bonds are one of the safest forms of investment and they’re backed by the full faith and credit of the Federal Government of Nigeria. Investing in them is risk free because the Federal Government hardly defaults on debt repayments.



  • It  can be used as collateral for loan.
  • Interest earned from it are tax free.
  • Good for savings towards retirement, marriage, school fees, house projects, etc

I hope you find this informative; and if you have questions or contributions, you can always leave it in the comment section below.

Remember: This is an investment option we can all engage in. Let’s give it a try.

Have a great week, and until next time,

Happy Economist.



6 thoughts on “The FGN Savings Bond: An Investment Option For All Income Groups

Add yours

  1. So, I’m guessing the way the interest is paid is kinda similar to alat, right? That’s part of the interest will be dropped bit by bit periodically in your account?


    1. Hello Dee,

      It is not similar to this FGN Savings Bond. The First Bank Insurance plan has a lot of options under it. Such as the , FlexiSave ( It is an insurance plan for Accidental death or funeral expenses), FlexiEdu(Parents go into this to finance their children’s education in the event of accidental death). FGN savings bond is an investment option while the FBN Insuarance is an insurance option.

      Insurance is a service or plan you purchase with the intention of guarding against loss of life, property, or health, as well as theft or damage, e.g car insurance MEANWHILE Investing, is when you give money or assets to a third party in exchange for the return of that money or assets with profit on the original value at an agreed point in the future.

      I hope this answer is helpful.


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