Treasury Bills are short term instruments issued by CBN on behalf of FGN at a discount. These do not yield any interest but are issued at a discount and repaid at par when it gets matured. Individuals, firms, companies, and financial institutions are eligible to invest in treasury bills.
Interest on Nigerian Treasury Bills (T-Bills) is not a fixed rate but varies based on market conditions, the tenor (duration), and the specific auction conducted by the Central Bank of Nigeria (CBN). The recent rates ranged between 15% to 15.77% in October 2025.
T-Bills are sold at a discount to their face value, and this discount rate effectively represents the interest earned when the bill matures.
Investors buy these bills at a discount to their face value and receive the full-face value at maturity, with the difference being their return. T-bills are a safe investment option, with typical tenors of 91, 182, and 364 days.
How Treasury Bills Work
- Purchase at a discount:
You buy a T-bill for less than its face value. For example, you might pay N95,000 for a bill with a face value of N100,000.
- Receive full value at maturity:
When the bill matures (after 91, 182, or 364 days), you receive the full-face value of N100,000, and the N5,000 difference is your profit.
- Interest is paid upfront:
The difference between the purchase price and the face value is essentially the interest, which is paid upfront at the time of purchase.
How to Invest in Treasury Bills
- Primary market:
You can bid for T-bills directly from the CBN through authorized dealers like banks and stockbrokers. The minimum bid amount is typically N50,001,000 in the primary market.
- Secondary market:
You can also buy T-bills from other investors in the secondary market, often with a lower minimum investment amount (as low as N50,001).
- Where to buy:
You can purchase them through commercial banks and investment brokers.
Key features of Treasury Bills
- Safety:
They are considered very safe because they are backed by the Nigerian government.
- Liquidity:
T-bills are highly liquid, meaning you can sell them to other investors before they mature if needed, although this may result in a lower return.
- Maturity:
Maturities are short-term, typically 91, 182, or 364 days.
- Non-automatic rollover:
The CBN does not automatically reinvest your money when a T-bill matures. You must contact your bank to roll it over into a new one if you wish.
Case Study: October 2025 Treasury Bills
The recent T-Bills primary market auction (PMA) held in October, the CBN offered a total of N570 billion across the three maturities (vs N280 billion at the previous auction). Investors demand remained firm, with total subscription amounting to N1.06 trillion, resulting in a full allotment of N570 billion.
The stop rate declined on the 182-day, and 364-day instruments, settling at 15.25%, and 15.77% (vs 15.30% and 16.78% in previous auction), while the 91-day tenor held steady at 15.00%.