Hello investment experts in the house! Please I really need your inputs on this.

I was with few of my friends yesterday and we got talking about investments and putting idle funds into proper use. in the course of our discussion, treasury bills investment came up and I gladly shared my recent experience about how I invested #1.5million in treasury bill through GTBank about two months ago (late June to be precise) for a period of 182 days (I.e 6months) and got about #126,000 as interest .

I have always put my idle funds in fixed deposit with Ecobank despite their low interest rate until a friend of mine talked me into giving treasury bill a shot so that was actually my first time of investing in treasury bill.

My main worry now is that, the interest ( Return on Investment ) I got wasn't commensurate with the stated percentage interest rate by the CBN as at the time I invested as depicted in the attached picture. Or is there a special way of calculating it ? Please I need the experts in the house to help me throw more light on this.

Thanks

It could be that your bank bought from the secondary market at slightly lower interest rate...
It could be that your bank deducted commission charges from your interest (as they usually do)

The calculation is as follows (based on your late June bid)

17.5/100×1500000/12*6=131,250... Maybe their deductions made the final figure to be at 126,000.

So you can go ask the bank what is their percentage charge for commission..
Because previously,interests earned from Treasury bills were not subject to withholding tax but I don't know if the 'change' orchestrated by this Administration has affected that policy.

lalasticlala,Mynd44

Its very simple
The formula is amount * days/365 * rate/100
Note that the rate changes at every auction and there are some charges involved.

In my honest opinion the amount you got is within the range of what you should be expecting.

eezeribe:
It could be that your bank bought from the secondary market at slightly lower interest rate...
It could be that your bank deducted commission charges from your interest (as they usually do)

The calculation is as follows (based on your late June bid)

17.5/100×1500000/12*6=131,250... Maybe their deductions made the final figure to be at 126,000.


So you can go ask the bank what is their percentage charge for commission..
Because previously,interests earned from Treasury bills were not subject to withholding tax but I don't know if the 'change' orchestrated by this Administration has affected that policy.

Thanks

Nutase:
Its very simple
The formula is amount * days/365 * rate/100
Note that the rate changes at every auction and there are some charges involved.

In my honest opinion the amount you got is within the range of what you should be expecting.

Ok..thanks sir

riversproperty:

Thanks

Anyday... Anytime. Happy Sunday.

eezeribe:

Anyday... Anytime.
Happy Sunday.

Thanks boss and do have a wonderful week.