₦airaland Forum

igbizen:
Please help

Next tomorrow...it will be held on Wednesday, 3rd July.

igbizen:
When is the next primary auction date of NTB?

This Wednesday, 3rd July.

nwolisar:
Is fidelity bank good enough to lock in, for the next auction??

Just in case we don't have any Fidelity account owners here who have recent Primary market auction experience, below we have detailed how Fidelity's 27th June secondary market compares:

On 27th June, Fidelity had the 2nd best secondary market rate that we know of (after I-Invest app) for treasury bills close to 182 days. This was 11.65% for 175 days.

However, it had one of the lower rates for tenors close to 91 days; 9.5% for 84 days.

For more detail, check http://comparedbest.com/ng/best-nigerian-treasury-bill-rates.html or http://comparedbest.com/ng/nigerian-commercial-banks.html .

Pascopele:
UBA secondary market rate as at Today.

Lets try to ask from other banks too.



Tenor (days) Discount Rate (%)
80 10.40%
150 12.05%
178 12.10%
220 12.15%
255 12.20%
297 12.45%
346 12.50%
360 12.65%

You will find many other bank T-Bills secondary market rates ranked here: http://comparedbest.com/ng/best-nigerian-treasury-bill-rates.html

Guruindahouse:
The link is not working.

the dot/fullstop at the end was the problem. Here corrected without the dot: http://comparedbest.com/ng/best-nigerian-treasury-bill-rates.html

Rijo02:
Nice rates. I just wasted my money fixing my account with Stanbic. I would have stayed with my GTB oo. Lesson: Please compare all your banks rates before trading with one so you don't feel bad afterwards.

@davit, please is there a way other than asking your account officer how someone can see the secondary market rates of different banks?

This link has some other commercial bank tbills rates and what date they were available: http://comparedbest.com/ng/best-nigerian-treasury-bill-rates.html

feelamong:
Also add the custody charges for holding the Tbills for you

Thanks Oga FeelAmong...We should have clarified the 0.1% of face value was the GTBank Custody charge.

bisiswag:
...Got tbills,secondary market at gtb for 12.25% 4 364 days.

However I didnt quite get d charges,almost 9k was deducted from my interest which was paid upfront.

N my account officer,i just did not understand his explanation for d charges.

Can we ask if you invested an amount in the region of =N=8.5million? When we last asked, GTB deducts 0.1% of the face value/whole amount and =N=300 flat upfront. A charge of almost 9k makes sense if you invested 8.3-8.7million.

Ikmontana1:
Good morning gurus
Pls ma t-bills investment will mature on March 14th, but d next primary auction after 2moro will b on d 13th.
ma question is, can I invest in d primary auction on March 13th wen ma last t-bills investment will mature on March 14th ??
If yes,
How do I go about it ? Tanx.

Oga Gavrelino123 suggests this is possible with GTB in a post regarding the last 13 Feb primary auction: https://www.nairaland.com/878880/treasury-bills-nigeria/696#75732560

damsolyn:
Ok I should try and raise 100k as start up capital then...thanks

Dont wait...N30k is enough to start earning better rates than 91day TBills...consider investing in a Money Market Mutual Fund instead. It has its own Nairaland thread: https://www.nairaland.com/1912965/mutual-funds/142#76181881. And you can see the daily rates made here: https://fman.com.ng/mutual-fund-price-list/.

MMFs accept as low as N5k. So, if you are not taking Oga ahiboilandgas's advice to start a business you know, then consider MMFs.

MMFs pool funds from many many people and invest your money in low risk financial instruments; a combination of Treasury Bills, Fixed Deposits etc.

PS: there are other types of Mutual Funds, so if you do not want to take significant risk with your initial capital, look out for Money Market Mutual Funds.

Akerewe:
dre is nothing like 5% vat on tb investment either prymary or secondary market, also no 25% penal charges whatsoever on earlier liquidation...

Please see Oga Freeman67’s contribution above. In addition to FirstBank,
> Union bank explicitly tells you it charges 5% VAT on some/all tbills fees/charges, and
> you can see this 5% VAT on Stanbics charges too in either secondary or primary market (not both); forget which market just now
> other banks probably charge this too; not all and not necessarily in both markets

The difference from Fixed Deposit VAT
> it is 5%. FD is 10%
> it is on fees/charges. FD is on your interest
> it is NOT uniform across banks, Nor tbills markets (can be on only Primary or only Secondary fees). FD is uniform across all banks and applies to all interest accrued

Regarding the 25% penal charge, I can see why you think we were agreeing it applied. We could have put it better. We believe FirstBank does NOT charge this. We were trying to convey the confusion probably comes from the 20% accrued interest forfeited if you terminate a FirstBank Fixed Deposit early. That does not mean no bank charges this, but we don’t believe FirstBank does.

cutedharmee:
Pls house I did invest in NTB and money was deducted on d 27th of November for 90days. When is d liquidation pls

There is a problem here, 90days from 27th November 2018 gives you 24/25 Feb 2019. But this is NOT possible for TBills as it usually expires Thursdays.

Please check your t-bills certificate/investment advice again. Request from your bank if you do not have same. For GTBank, I believe you can check your online account for the details.

Hopefully, you have not mistakenly been given Fixed Deposit instead. However, if you are approximating the tenor to 90days, then your correct maturity date might be Thursday, 28th Feb?

lolaluv1:
Please. When is the next t bills auction?

27 Feb, a week from today.

Speedyconnect15:
NOBODY IS SURE OF THE 25% ish.

He later said he invested 1,159,000 NOT 1,590,000. at 9.85% for 91 days.

So even with the 25% penalty, custody fee (0.35% max) and processing ( usually 100 naira); IT CANNOT amount to 11k.

Note: No vat is charged on tbills.


All are mere conjectures.

I am sure of Access though. I asked several workers but they had no idea. I had to liquidate as a form of experiment after I mailed the head office and got a clueless response.

Cc
Comparedbest

Btw, I like your diction sir . Stellar

We admire your analysis sir/ma! Can you give specifics regarding your Access pre-liquidation so we have a better real life example for reference?

There is 5% VAT on some/all fees depending on the bank and market you buy tbills from (not on the upfront interest itself). However, even if we assume this applied and his Rediscount Rate was the 11% common in FirstBank’s secondary market at the time, it still does not add up to 11k. We agree with your assessment; note also we believe the 25% penal charge probably comes from Fixed Deposit early termination treatment, which is 20% forfeiture of interest earned for FirstBank.

We gave the example on that link not for the specifics, but because it states with the clearest evidence yet that you can lose part of your capital. If it helps, we have asked most commercial banks too and they echo that truth, in their own words, clear as day, black and white.

Speedyconnect15:
...Experience is the best teacher here I guess.

It certainly is. However, nothing new under the Sun, you have some experience on this thread you can learn vicariously from: https://www.nairaland.com/878880/treasury-bills-nigeria/553#70597013

Still best to ask your bank for specific advise before submitting your termination instruction so they tell you realistically what to expect. Rates have not fluctuated as much as the 10% to 18% example you requested, so, after 100 days, it is unlikely you will lose any of your capital.

Also consider trajectory; if rates are falling, waiting 2weeks to terminate might make a world of difference. Conversely, hurry to pre-liquidate if you believe rate rises are expected.

Speedyconnect15:
Do you know what happens upon liquidation before maturity.


If I invest 1m at 10% for 365 days, what happens if i need money for emergeny and I liquidate on the 100th day?

Some people said here that I could lose all interests and even my capital. This stems from the premise that rates at the time I am liquidating, could be at 18% whereas I did it at 10%. Their belief is that same T bills will be resold to someone that will now hold till maturity, however at higher interest rate now-- 18%.

"Some people" are correct. There is NO cap to your loss. With the extreme example you gave, you can lose a good % of your capital. Let's do some simple math without taken charges into consideration:

capital - N100k
tenure - 364 days
discounting - 10%pa
rediscounting - 18%pa

You get N10k upfront, N90k deducted. N100k to be credited on 364th day
Day 100, pre-liquidation - some banks (not sure if all) tell you the rediscounting rate so you can reconsider or accept & write formal instruction
The instruction needed to terminate your investment would be N100k @ 18% for 264 days. Your capital and upfront interest needs to fund all of it. That is give N(100*18/100*264/365)= approx. N13k upfront interest to the secondary market buyer.
So you get N110k - N13k = N97k. But, we did not consider charges, so you actually get less

This is why if you scour through this thread, you will tire before you find any of those stalwarts of investment you asked this question saying they pulled their funds halfway. It is an unwritten rule. Understandably, it is only broken as a last resort.

However, the opposite situation can also arise, and some investors use these as opportunities. Imagine you had 1bn and rates fell by 2% in a week; in 7days you could earn 2% of 1bn by rediscounting in the secondary market, give or take some charges.

SifonAbasi:
Hello house, pls can one buys Tbills from a bank h/she does not have an acct with? Also is National ID, PVC or Intl passport a requirement? Thanks

Not sure about requirements, but, Yes, you can. It differs from bank to bank, each with their own requirements. At least the following have said you do not need an account with them:

>Heritage
>Sterling i-invest app
>Union
>Wema

Most others have said you do, but things move on, and in some cases what the application form says contradicts what customer service/care says. So, ask your customer care or branch. If they say no, go eagle-eye on the application form to see if it says anything about paying with bank-draft, cheque etc Be sure you know all the (COT etc.) costs involved if you choose this path.

igbizen:
...I also learnt the next bidding is on the 26th of Feb...

on this smaller point, bids are held Wednesdays usually, so next bidding should be Wednesday 27th Feb.

bless0043:
...help me with page where the link fro TB calculation is

Latest one posted on this thread: https://www.nairaland.com/878880/treasury-bills-nigeria/689#75415986

enemarieal:
...Are they banks that usually offer better rates.

Yes, some recent examples:

Fidelity (7 Feb): 357 days @ 14.5%
GTBank (1 Feb...they should have similar after getting 14.85% for 364 days on 13 Feb): 363 days @ 14.5%
UBA (18 Feb): 346 days @ 14.4% and 297 days @ 14.3%
Stanbic (15 Feb): 14.25%
Union Bank (18 Feb): 325 and 318 days @ 14.25%
FCMB (18 Feb): 360 days @ 14.2%

We maintain a fuller list with other tenures for the secondary market on our website. And give dates so you know when the information was valid. We hope this information will be useful some day to this forum, but want to add other features first; not least, calculators.

carbon1224:
When is the next date for primary auction

Wednesday 27th Feb. Do have your instructions submitted and acknowledged by 1pm Monday 25th preferably, but up to 1pm Tuesday worst case.

lolaluv1:
...If too high, please what bank can I do with again? And do I need to open an account?

The biggest cost of purchasing tbills is typically Custody/Safekeeping fee. GTBank's charge is 0.1% which is fair. You will potentially get lower from CBN/FGN's licensed custodians: https://www.cbn.gov.ng/out/2014/bpsd/licensed%20custodians.pdf . This is not certain. By our calculation Stanbic & Union charge one of the lowest; likely 0.05% + 5% VAT. If FCMB figure 0.015% checks out, then it will be the lowest we know of. See our earlier post for more details: https://www.nairaland.com/878880/treasury-bills-nigeria/690#75466434

Unlikely, but if you have been charged COT in the transaction cos your money sits in a current account, then consider moving your money to a savings account before future t-bills purchases.

Note you should consider rate as well as cost. For example, if you get 14.95% with high initial cost and 14.25% from another with lower outgoings, the 0.7% extra yield might more than make up for the higher cost.

Akeey:
Right now I really don't know how this tb works but from your testimony I will like to get an idea on how I can start investing and the requirements. Thank u

Akeey, as I see you reading now, know that TBills is probably the safest high interest yielding investment right now as you are loaning money directly to the producer of the local currency/Naira; i.e., the Federal Government of Nigeria.

You can invest in it via 2 markets; every other Wednesday via Primary Market, or every working day via Secondary Market. Primary market has tenures of 91days, 182 days and 364 days. Secondary market has every tenure between 7 and 364 days. The last primary auction held on Wednesday 13th Feb. Next on 27th. All past results are discussed on this thread and detailed on CBN's website: https://www.cbn.gov.ng/rates/govtsecurities.asp .

However, this post gives you options on where to submit your instruction to purchase tbills from a bank: https://www.nairaland.com/post/75850892 . It can be purchased from other sources too/financial institutions, like merchant banks, brokers. This thread typically uses (commercial) banks.

Akerewe:
good day house, pls how much does stanbic charge on liquidation of treasury bills as a penal charges?

Not sure, also interested if any Oga/Madam here has experience. However, the reply we have from them suggests they do not have penal charges but you are subject to prevailing market rates, as with all other banks. This means you can lose even some of your original capital in addition to your upfront interest forfeited depending on how much the tenor has left and the difference btw your discount rate and the rediscounted rate. Their reply: "There is a ₦300 transaction fee and some upfront interest might be taken from your principal based on the termination request date and prevailing market rates"

dexla:
Thank you for this explanation. really appreciate it. i guess I'll go for first bank

Just before you do that, new evidence has emerged since our reply that suggests

> Stanbic IBTC got best rate for 364 days (14.95%) on 13 Feb Primary Market Auction, followed closely by GTB (14.85%)...possibly UBA too based on the competition beating rates they are currently offering in the secondary market: https://www.nairaland.com/878880/treasury-bills-nigeria/696
> SkyAngel recently asked Stanbic to reinvest interest although the option was not on the form, and they did, at least in the secondary market: https://www.nairaland.com/878880/treasury-bills-nigeria/697#75781784
> logically, because it is not an option on the form does not mean you should rule something out. Ask your bank with the top rates before you try elsewhere
> Recent rates from FirstBank have not been encouraging: https://www.nairaland.com/878880/treasury-bills-nigeria/697#75752873 . But check as it moves daily in the secondary market

Note banks that lead in Primary Market (Stanbic, GTB) do not always lead in secondary (UBA). Lead is not divine right, and changes daily/weekly. We implore you to compare any rate offered to you to the rates from some other top banks. And always ask their customer care directly if they can reinvest interest...we suspect the answer will usually be A BIG FAT YES!

fnglng:
Please house, is there a way that someone that is outside the shores of Nigeria can do this TB.. maybe online through banks?

Yes, typically if you have an account with them already and have agreed email/online indemnity. Otherwise you might be able to open one from abroad, and agree an indemnity too.

Options open to you include:
> send email to/call their customer care; they can also guide you to the right channels
> send an email/txt to or call your account officer/relationship manager
> at least 1 online for Access Bank; tbills.ng
> at least 1 mobile app for Sterling Bank/Parthian Partners; I-Invest

dexla:
I'm actually a newbie here and I'd like some clarification.
So I was wondering if I decide to invest in TBills and I went through my bank, will they allow me capitalize my interest?

This reply is for reinvesting your interest to compound it, or get the True Yield of T-Bills. Please skip or ignore if capitalize means something entirely different:

Ogas on this thread with experience on the matter discussed this most recently on pages 689 and 690. However, if you are time poor like all of us really, try these main replies:
https://www.nairaland.com/878880/treasury-bills-nigeria/688#75396323
https://www.nairaland.com/878880/treasury-bills-nigeria/689#75409612

If we were to summarise
> FirstBank (maybe few others) explicitly offer reinvesting interest on their application forms
> GTBank does not explicitly offer, however, because it only deducts the discounted amount (Capital - upfront Interest), you can state the amount you want to invest is (Capital + upfront interest). GTB then deducts your full capital, including what would have been your upfront interest. Example, say you know the t-bills rate of your bank to be 10%, and you have N900k to invest. If you say you had N900k to invest, GTB will deduct only N810k and credit you with N900k at maturity. However, with this trick, you say you have N1m to invest, then your full N900k will be deducted and you get N1m at maturity.
> It may logically follow that other banks which deduct only discounted amount, not those that deduct full amount then credit back upfront interest even if minutes apart, might also allow the GTBank trick above
> caution should be taken to test above first, even with GTBank as Oga freeman67 only did it ages ago, and every bank does it's own checks differently.
> Also important, in addition to the capital to be deducted, account should have spare cash for all charges (commission, custodian/safekeeping, transaction, processing, 5% VAT on some or all of the preceding fees)

needful:
There are alot of clone sites out there. If you have there email, pls give me..

https://www.stanbicibtcbank.com/Nigeria/AboutUs/contact-us
CustomerCareNigeria@stanbicibtc.com

Happyfellow147:
Please someone should educate us on this safe keeping fee thing.

We believe Stanbic calls it a different name from other banks; it is aka Custody or Custodian fees. It is charged on your full capital aka face/maturity/nominal value. By our calculation Stanbic & Union charge one of the lowest; likely 0.05% + 5% VAT. If FCMB figure 0.015% checks out, then it will be the lowest we know of. The biggest we have seen is Access Banks tbills.ng/Keystone/Unity custodian fee of 0.35%.

Some useful reads:
> https://www.nairaland.com/878880/treasury-bills-nigeria/232#50858427

> https://www.cbn.gov.ng/out/2014/bsd/transfer%20of%20all%20non-proprietary%20assets%20to%20licensed%20custodians.pdf

> Buying directly from the banks affiliated with approved custodians will probably give you lowest deduction: https://www.cbn.gov.ng/out/2014/bpsd/licensed%20custodians.pdf

> If you are PhD type: https://www.cbn.gov.ng/OUT/CIRCULARS/BOD/2009/GUIDELINES%20FOR%20CUSTODIANSHIP%20IN%20MONEY%20MARKET%20AND%20OTHER%20FIX%E2%80%A6.PDF. Excerpt: Remuneration - The Custodian shall be entitled to charge: a. custody fee of not more than 0.35 per cent per annum charged monthly; b. transaction cost of N500.00 per transaction; c. In addition, a custodian may share revenue with a non-custodian bank that appointed it as a custodian up to 20 per cent of the revenue earned on the business.

UNIXLover:
Hello guys, am new to treasury bill, whats the best way to buy T-Bill? I currently operate Access and GTB .Thank you

There are 2 ways primary market and secondary. See comparison of the 2 here: https://www.nairaland.com/878880/treasury-bills-nigeria/679#75118802.

The latest rates we have seen, GTBank has offered more than Access. But, this moves daily. If you decide on secondary market, ask your account officers or a local branch for rates for a duration that suits your needs. Please always share with us here

You cannot know primary rates beforehand. However, in last Wednesday's auction, successful bank bids were 10.85-11% for 91 days, 12.85-13.5% for 182 days and 14.3-15% for 364 days. This can be a good indication of rates in the next 13th February primary auction. Note this thread currently believes rates are in decline, so it expects rates to fall in the near future.

Plus10:
Please house when is the next primary auction?

Wednesday, 13th February. Get your request in preferably by Monday 11th.

mikylon:
...
which is more preferable, stashing money into money market or stashing into treasury bill. Which would guaranty high yield annually.

This is NOT financial advise, but something to consider. From our research:

Amount
MMF allows lower minimums, typically from N5k,
TBills typically from N100k, although UBA advises it accepts from N10k primary market we have never tested this.

Flexibility
MMF typically have a minimum holding period of 30days after which you can treat it as a savings account effectively, but each provider has its notice period for withdrawals, none more than 7days we believe
TBills can have stiff penalties or loss of some of your capital depending on the rediscounted rate and early termination date. However, sometimes, no penalties and the rediscounting rate is less than the rate you originally got. So, you can profit

Deductions
MMF usually has no charges if you stick to the holding period, typically 30 days
TBills primary 91, 182 & 364days
TBills secondary 7 - 364days

Rates
>MMF typically beats even the true yield of 91 day Treasury Bill rates; check daily MMF rates @ https://fman.com.ng/mutual-fund-price-list/, and also see reports from individual providers such as Ecobanks MMF @ https://www.ecobank.com/corporate-investment-banking/wsa-management/collective-investment-schemes.

>182, even better, 364 day TBill rates typically trump MMF. See https://www.cbn.gov.ng/rates/govtsecurities.asp for 30 Jan's auction and other historic TBill primary market auction rates

>MMF rates as advertised/published are regularly disputed by those with MMF accounts; see https://www.nairaland.com/1912965/mutual-funds/138. It seems checking your daily balance comes with the territory, and customer service is not necessarily as well staffed.
With TBills you get your interest upfront and simply diarise the maturity to ensure your capital is recredited as it usually is. So, TBills typically gives less stress

Summary
Simply put, if you have less than N100k, but at least N5K...OR want to invest any amount for less than 182 days, strongly consider MMF.

However, if you are a control freak, or have OCD like some of us and want to know the exact rate you will earn...OR do not want to be login in to check if your money tree is growing every day/week...want to earn interest upfront...or prefer tenures 182 days or more, TBills might be your preference.

Also consider, using the strengths of both as a strategy; i.e., replacing your savings account with MMF (require some planning because of notice required for withdrawals) and TBills for midterm investment...one day even FGNBonds for longterm if the rates get more distinct/higher than 364day tbills.