Investing in Treasury Bills
Q: What is the minimum investment in T-bills with Afrinvest?
Minimum investment is N100,000 (One hundred thousand naira only).
Q: What are the other benefits of Treasury Bills?
It is a risk-free investment as it carries the guarantee of the Federal Government of Nigeria T-Bills are highly liquid instruments and can be used as collateral Liquidity-active secondary market for ease of entry and exit (though at a cost) Interest ...
Q: Can I roll over my Treasury Bills investment?
Yes, you can rollover. However, this is not done automatically. Your account officer will notify you few days to the maturity of your investment requesting you to state if you desire that your investment be rolled over or paid into the bank account ...
Q: Can I sell before maturity?
Yes, you can sell T- Bills before maturity. However, the price at which you sell depends on the prevailing interest rate. For instance, a N1 00,000 Face Value (FV) T-Bills maybe selling for less or more depending on the prevailing interest rate as at ...
Q: How are T-bills different from OMO?
T-Bills and OMO (Open Market Operation) are similar and work almost the same way. Whilst T- Bills are issued to finance government budget deficit, OMOs are issued by the CBN for monetary policy management i.e., to control the volume of money in ...
Q: What do I benefit from investing in Treasury Bills?
Treasury bills in Nigeria are guaranteed by the full faith of the Federal Government; hence there is no default, if the government cannot pay, the CBN can print money to settle all investors. Treasury bills are fixed-income investments and income ...
Q: What is a Treasury Bill auction?
In the primary market, the CBN conducts T-Bills auction usually every fortnight and requests investors to quote the rates they are willing to pay on the different tenors of T-bills usually 91- day, 182-day and 364-day instruments. At the auction, the ...
Q: What is a Tenor?
T-Bills are issued for a specific period usually 91-day (3 months), 182-day (6 months) and 364-day (one year) tenors in the primary market. The rates on T-Bills are quoted annually; as a result, an investor gets the full rate only if the tenor is up ...
Q: Primary and Secondary Market for Treasury Bills
A T-Bill can be purchased either in a primary or secondary market. The primary market is when the investor buys directly from the CBN through a public auction carried out every fortnight while in the secondary market, an investor buys from an ...
What is a True Yield?
True Yield is your effective Return on Investment (ROI). Using the illustration above, the initial yield for the N100,000 is 10.0%. However, because interest is paid upfront, your true yield is actually the N10,000 interest received divided by the ...
Q: How do Treasury Bills work?
T-Bills are discount instruments, and they are so called because the investor gets its interest upfront. This means that the interest promised on a T-bill instrument is payable on the very day the investment commences. For instance, if a T-bill ...
Q: What are treasury bills?
Treasury Bills (T-Bills) are short-term debt instruments issued by the Federal Government of any country through its Central Bank to raise short-term funds from the public (private individuals, institutional investors, non-governmental organisations, ...