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All You Need To Know About The New FGN Savings Bond. - Investment - Nairaland

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All You Need To Know About The New FGN Savings Bond. by akaglue(f): 5:09pm On Mar 13, 2017
Q: What is the FGN Savings Bond.

A: FGN savings bond is a bond issued by the Debt Management Office on behalf of the Nigerian government. The bond is tailored and targeted at retail investors and includes a guaranteed interest payment and repayment of the principal.

Q: How much is the interest rate?

A: 13.01% annual rate. Interest is paid quarterly.

Q: What is the minimum / maximum investment?

A: N5,000 minimum. N50 million maximum.

Q: What are the benefits for me as an investor?

A: Good savings/investment opportunity.

Bond can be accepted as a form of collateral.

Bond can be sold at the secondary market.

Interest is tax free.

Minimum entry requirement.

Secured investment as the Bond is backed by the full faith and credit of the Federal Government of Nigeria.

Q: How do I subscribe?

A: Through a stockbroker.

Q: I don’t have a stockbroker?

A: It is easy to open an account with a stockbroker. Most of them are online. Simply visit the website of your choice security firm and complete their online registration form.

Q: The offer is up for only 5days, I can’t meet up with this?

A: Not to worry, the FGN savings bond issue will come up every month and you can also buy from the secondary market.

Q: What is the tenor of the investment?

A: It is for 2 years.

Q: I can’t tie my money down for 2 years?

A: The FGN savings bond can be sold in the stock market.

Q: Is it a better investment that treasury bills?

A: Note: Minimum entry requirement for treasury bills has been raised from N100k to N50m. However, one can still purchase from the secondary market through your bank. So to determine the better option, ask your bankers for the interest rate of treasury bills offered in the secondary market and compare with the 13.01% of the FGN savings bond. Also, unlike treasury bills were interest was paid upfront, interest for the fgn savings bond will be paid every quarter. The FGN savings bond also has a longer tenor than treasury bills.

I hope this covers all.

Make 2017 count, don’t eat it all. Save right and invest smart.

Need more financial advice? Visit.


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