Treasury Bills: A Safer Way To Invest Money Than Ponzi Schemes


Living in a fluctuating economy like that of Nigeria requires solid financial backup to stay afloat. Rather than run after different Ponzi schemes that are bound to crash, it is safer to invest in a reliable and sustainable platform like the Treasury Bills.

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The Central Bank of Nigeria has made it easier for people to save money and get significant interests with the introduction of Treasury bills.

The Treasury Bills have not been made so popular because CBN does not advertise like Ponzi schemes do. However, this is all you need to know about Treasury Bills.

Also called T-Bills, Treasury Bills are a type of government securities issued on behalf of the Federal Government by the Central Bank of Nigeria (CBN) to control the money supply in the economy.

However, unlike other government securities such as Federal Government of Nigeria (FGN) Bonds and Federal Government Development Stocks (FRNDS) which are long term in nature, Treasury Bills are short-term securities issued at a discount for a tenure ranging from 91 to 364 days, and they do not yield regular interest.

How The Treasury Bills Work

If you buy T-bills worth of N500,000 at 10 percent discount rate, CBN will debit your account of N450,000, leaving a balance of N50,000, which is your interest paid up front.

At the end of the tenure of investment, you will be paid N500,000 (your original money) which will be credited back to your account even without you asking for it.

Each investment has a duration, called the tenure and it is usually 91 days (3 months), 182 days (6 months) or 364 days (one year).

Treasury Bills: A Safer Way To Invest Money Than Ponzi Schemes

How To buy T-bills

According to CBN, T-bills can be purchased both at the primary and secondary markets. The following steps are the procedures laid down by the apex bank:

The primary market is the Central Bank of Nigeria located at the Securities Dealing Office and Settlement and Control Office, while the secondary markets include banks and discount houses.

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According to a business source, in both the primary and secondary markets, tenders for the T-Bills are submitted on Mondays, Tuesdays, and Wednesdays before 1.30 p.m on the prescribed printed forms and in a sealed envelope marked “Tender for Treasury Bills.” The accounts of the authorized dealers must be funded to enable a debit at the end of a successful transaction.

How to Get Back Your Investment Before it is Due

If you are in urgent need of funds you may sell your T-bills before it is due to be paid back to you, using the OTC market. Whether you can sell for more or less of your face value depends on the forces of demand and supply.

For instance, a N505,000 (higher value), provided your face value is trading at a higher price. However, you may have to sell at a loss (N545,000) if your face value is trading at a lower price.

Benefits of T-bills

Unlike Ponzi schemes and other unverified investment schemes, the interest on Treasury bills investment is realizable upfront and can be automatically reinvested for a higher income.

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It is competitive as various banks offer variable interest rates. It is tax-free and the securities can be used as collateral for short-term borrowing from banks.

So, if you have any money that does not have an urgent purpose of utilization, the wisest thing to do is to buy [invest on] treasury bills rather than keep the money dormant in your account.

All you need to do is walk into any bank you have an active account with and request for a treasury bill tender form.