Nigerian Treasury Bills; How to invest through your bank and make money fast
Treasury bills rate from CBN are investments you should consider, if you are seeking for ways to make money in Nigeria.
These Treasury bills are short-dated in the Nigerian government securities, which yields no interest with a maturity of less than a year. Nigerian treasury bills are given at a discount on its redemption price.
Also, Nigerian treasury Bills are short-term securities given at a low rate for a tenor ranging from 91 to 364 days, in such a way that the income received is among the retail price together with the money received at maturity or before the sale, according to the CBN.
How to Get Nigerian treasury Bills
To get Treasury Bills, all that an investor must do is to visit any of his/her bank branches, fill and submit an application form, provide its bank-account, the total amount to be invested from his bank account along with the preferred tenor.
Investors need to visit Amy of his/her bank branches in order to get Treasury Bills. Then fill and submit and application form.
Among Investment areas available through banks are Treasury Bills which gives customers liberty to invest high-yield assets which are non-risky and tax-free.
These are good investments for idle savings, which gives big returns in less than one year. Here, Treasury rates are also very liquid and can be converted to cash quickly.
Benefits of Getting Nigerian Treasury Bills
Reports on thestreet stated that the Treasury Bills are among the best quickest term Treasury securities. People can invest and it matures in a year (from when it’s issued). Therefore it issues 3-6 months bills per week as well as a one year bill every month.
Treasury Bills are discount instruments, instead of making interest rates, they are issued at a discount rate to face value and mature at face value (usually less than a year). The interest rates are usually the reason for the purchase price, the amount paid to the holder at maturity and the time remaining till maturity.
The bills here are quoted as regards to their discount rates, or quoted on monthly interest based on one year. Just as Bonds yield and the discount rates are rising, the bills will lose value. “Bond-equivalent yields” can be calculated for the bill to allow for an evaluation to other debt instruments in the treasury bills market.
Subsequently, as reported on another report here howstuffworks Treasury Bills are as well known as “T-bills” which are securities given by the federal government. As you buy one, you are considered to be lending money to the government. The word security here means any medium useful for investment. Mediums like bills, stocks or bonds. Treasury Bills also have a face value to a certain amount, which are what the bills are actually worth from the time they were given. Meanwhile they are sold at a discount. For instance, an invoice will be worth N10,000 mean while it’s sold for N9,600
All bills carry a specific maturity date, and that is when you will have the money-back. Therefore, the government pays you the actual price of the bill, in this case N10,000 and you earn N400 from your investment.
The returns here is considered the interest, or payment for your loan of your money to the government. The difference between the value of the Treasury bill and the total amountyu pay out for the bill is called the discount rate therefore it is set as a percentage. In the instance given above, the discount rate is 4% because N400 is 4% of N10,000.
Considered as one of the safest types of investment in the world, Treasury Bills are supported by the government. They are also seen as risk-free investments and are also used by many other governments around the world.
Importance of Saving Your Money
As reported on thefinancebase, saving money is important to the owner because it provides people the opportunity to earn interest while keeping their money safe. Even though investing money can be dangerous, it offers higher returns than bank savings account and can help people build wealth for a long time. Savings vehicles and also other savings account are also useful since they give you the ability to earn interest on the savings, while you’re not exposed to risk investment.
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Just as the rates are usually low, money earned in interest is invitation for saving. Savings account and your money market accounts are created to provide the account holders access to their money any time.
Meanwhile, it’s pertinent to note that fixed deposits impose a penalty to the owner if the funds are withdrawn earlier before the expiry date of the certificate, but generally this type of savings has higher interest levels than an ordinary savings account.
Final Thougts On Nigerian Treasury Bills and General Investments
In summary, the importance of investing will be the opportunity it gives for building your wealth in the long-term. Diversification could be a risk minimizing concept that spreads money among different types of investments that may offset losses in a single investment type with profits in another. As a result of risk-free investment in treasury bills, the returns on the investments are typically higher than those on savings account.
Setbacks in Treasury bills are that you won’t have a great return because treasuries are exceptionally safe. Corporate bonds, certificate of deposit, and your money market funds can give higher interest levels.
You might also not get back your entire investment if you cash out before the maturity date. You can understand why the Treasury bills (T-bills) are a smart investment to the individual investors, and it’s an important factor when you think about short and long term investment in Nigeria.