Learn the Basics on how to Invest in Treasury Bills.
Investing in Treasury Bills has recently become a widespread choice by retail investors, as the yields became more attractive.
Treasury Bills are available for investment in two markets, the Primary market, and the Secondary market.
Treasury Bills in the Primary Market
The Primary Market is where new issues of Treasury Bills are made available for sale by the Central Bank in tenors of 91 days, 182 days and 364 days. All investments are made through bi-weekly auctions, which take place every other Wednesday.
Successful subscribers at the auction are determined based on the Dutch multiple price auction system, under which successful applicants pay for their allotment at the price quoted by them.
The Accounts of the Authorized Dealers with the Central Bank must be funded not later than 24 hours after the auction results are announced.
In the Primary Market, the minimum investment was increased by the Debt Management Office(DMO) in March 2017 from N10,000 to N50 million, just before the launch of the FGN Savings Bond Issuance Program.
Treasury Bills in the Secondary Market
Secondary Market activities cover investments in Treasury Bills of maturities shorter than 91 days, 182 days and 364 days respectively. The Secondary market also accommodates retail investors with less than N50 million to invest.
The Authorized Dealers (Banks) trade Secondary Market Bills with the investing public, by making available the maturities of Treasury Bills(with the implied tenors) and the Bid-Offer discount rates.
The minimum investment in the Secondary Market is much lower, and varies between N50,000 and N100,000 depending on the Authorized Dealer.