DaniellaDokubo:
But that's why it is FGN bond. For FGN savings bond that is the maximum you can buy and minimum is NGN5, 000. FGN savings bond is offered on the first Monday of the month.
For those talking about inflation in comparison to the interest rate on offer. Well that's not a good idea to assess this. Inflation doesn't generally affect every item of goods and services that has a price tag. However you need to consider the fact that this is investment that is risk free.
A simple analogy might help here:
Assuming you have ngn40m to build a house of say 4flats in a semi high brow estate. You get rentage of ngn1m each that's ngn4m yearly. This is definitely going to be with maintenance as time goes on. You will pay government charges, rates etc. You might experience bad tenants sometimes etc.
On the other hand with FGN savings bond with the March 2019 rate which is about +12% I will get NGN4.8m flat with no risks. You are even on tax exemption.
In addition you can trade the bonds on the NSE and you can even use the certificate as collateral just like the building too. It is easily liquidated as well.
Even though owning a house is something that comes with prestige and some sense of pride, its a hype as it doesn't pay better business wise.
These are my thoughts, I stand to be corrected.
Thanks for the insight and perspective you brought to the discussion. Please could you give us a breakdown of the interests an investor of N50m into this FGN Bond could possibly earn annually at 12.75% (biennial coupons) and a sense of total interests payments that could possibly be earned during the period till maturity in April 2023?
Business › Re: Federal Government To Auction N100 Billion Bonds On March 27 by Chuksos: 5:26pm On Mar 23, 2019
