treasury bill
A treasury bill is a short term loan you make to the government, which pays you back with interest on a fixed date.
In plain English
A treasury bill is one of the simplest things in finance, and one of the most misunderstood, mostly because the name sounds like it belongs to somebody else.
It works like this. The government needs money for a while. You lend it some. On an agreed date, usually 91, 182 or 364 days later, it gives your money back with interest. That is the whole product.
What makes it different from lending to a person or a company is who is on the other side. The Nigerian government is about as reliable a naira borrower as exists, because it controls the currency it is repaying you in. That is why treasury bills are treated as the safest naira investment available.
Safe does not mean profitable. If bills are paying 18 percent while inflation runs at 25, you are losing purchasing power politely and on schedule. Which is why they are best understood as a place to park money you will need soon, rather than a way to build wealth over decades.
You buy a 364 day treasury bill with ₦500,000 at a rate of 19 percent. You know today, with near certainty, roughly what you will receive when it matures next year. No price to watch, no news to follow, no decisions to make in between.
Questions people ask
How do I buy treasury bills in Nigeria?
Through your bank, a licensed stockbroker, or a regulated investment app. Banks often set a high minimum, while apps and funds let you start with far less.
Can I get my money out early?
Usually yes, by selling the bill on the secondary market, but you may get less than you expected. Treat the maturity date as the plan, not a suggestion.
Are treasury bills better than a savings account?
They almost always pay more than a standard savings account, which is why they are worth understanding. Compare both against inflation rather than against each other.
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