petikal:


Banks rarely give you CBN rate, unless you're an excellent predictor.

Here are your possible outcomes:

- You specify 12.3%, and bank wins at 12.3%, you get 12.3%. Bank makes no money.

- You specify 12%, bank wins at 11.98%, you miss out. Your money stays in your account.

- You don't specify a minimum, bank bids to their best max and wins, you get the winning percentage minus 0.2-0.4%.

MOBBDEEP:

Thank you very much.
I sincerely appreciate.

But you raised more dust for me.
Kindly pardon & oblige my inquisitive ignorant mind.

Does that means different banks/agents get varying rates depending on their bargaining power?
Let me paint a scenario.
I give a minimum point of 12% for 182 days to my bank Stanbic IBTC who bidded 12.5% and the CBN final rate for the week is 13.5%. Meanwhile, 1st Bank & Union Bank bidded 13% & 13.5% respectively

What is the outcome of the above illustration?

Thank you Sir

petikal:


You have to bear in mind that your contract is really with CBN, not your bank who's merely a representative. Whatever stop/marginal rate CBN offers for each tenor goes across ALL banks, and their bids are usually not far off. This is because CBN states the marginal rate before opening up for bids. So, if a bank bids a rate higher than the marginal rate, it'll be rejected, and one that's <= will be accepted.

The difference between banks is the percentage they deduct from you for their service, which is negligible.

MOBBDEEP:


Thanks for the whole time & energy.
I appreciate deeply .

nitrogen:
Getting better, but riskier.

Bellafinesse:
Well done sirs, Pls I wanna know if you quote more than your bank like say you quote 12% and your bank wins at 11.98%,you said your money stays in your account. Does that mean I won't get paid @al? I invest 100000,nothing is paid if I decide to invest it for 91 days?

petikal:


You have to bear in mind that your contract is really with CBN, not your bank who's merely a representative. Whatever stop/marginal rate CBN offers for each tenor goes across ALL banks, and their bids are usually not far off. This is because CBN states the marginal rate before opening up for bids. So, if a bank bids a rate higher than the marginal rate, it'll be rejected, and one that's <= will be accepted.

The difference between banks is the percentage they deduct from you for their service, which is negligible.

walcolm:


so does that mean if you bid 12% for a 91-day bill but CBN accepts 13.5% for the same bill, the bank will book you at 13.5%?

walcolm:
rates are always quoted per annum...so your 10% on the TBills is 10% per annum

your maths is correct...you only get 2,500

petikal:


Yes, 13.5% minus the bank service fee.

walcolm:

Nah, I can assure you the bank will only give you your 12% less their own service charge and keep the difference for themselves

walcolm:

so does that mean if you bid 12% for a 91-day bill but CBN accepts 13.5% for the same bill, the bank will book you at 13.5%?

petikal:

Yes, 13.5% minus the bank service fee.

walcolm:

Nah, I can assure you the bank will only give you your 12% less their own service charge and keep the difference for themselves

petikal:

Depends on the bank, some are more transparent than the other and have integrity to maintain. 12% is minimum bid you specified, not maximum. So, legally, you should get the bank's winning bid (if it's higher) and they're usually not far off from CBN stop rate.

MOBBDEEP:


Thank you very much.
I sincerely appreciate.

But you raised more dust for me.
Kindly pardon & oblige my inquisitive ignorant mind.

Does that means different banks/agents get varying rates depending on their bargaining power?
Let me paint a scenario.
I give a minimum point of 12% for 182 days to my bank Stanbic IBTC who bidded 12.5% and the CBN final rate for the week is 13.5%. Meanwhile, 1st Bank & Union Bank bidded 13% & 13.5% respectively

What is the outcome of the above illustration?

Thank you Sir

jpphilips:



Don't bother submitting any bid, just get a financial house affiliated to a bank, they do a lot of insider trading and their stop rates are exactly what you expect, that is what I have noticed since I started in 2001

Chillisauce:


Eg of financial house affiliated to a bank ?thanks

Chillisauce:


Eg of financial house affiliated to a bank ?thanks

jpphilips:


First capital but don't quote me on the insider trading part

Elai147:




If you submit your bid to your bank and gave an instruction that you are bidding at NOT LESS THAN a certain amount, you will get that amount and nothing more. Assuming you asked your bank to bid for you at a rate not less than 10% and you're successful, what you will get is 10% (if your bank actually submitted your bid in the PMA). In the auction market, bids have to be exact. There is nothing like "AT LEAST 10%" otherwise everyone would bid at "at least 1%" and expect to get their bank rate (banks no be maga na). However, if you say to your bank that you want a rate not less than 10% and eventually get more than 10% from them, this simply means they may have sold for you from their successful bid.

Bamz:
Three of my TBills investment matured recently but I will have to wait until after elections to put in for a new investment. I'd fancy the 365 tenor period this time. Getting as close as 12% wouldn't be bad.

princeuk21:
i'll advice you wait after the election.

zeelo2014:
While waiting for the elections, where will the money be? Deposited in the same bank or right under your bed? Lol.

princeuk21:
fixed deposit or any better short term investment