₦airaland Forum

2n2k:
Note that stanbic doesn't debit you until your bid is successful and will only debit you with the discounted amount only.

However, it will freeze the face-value of your bid (though still in your account but not available for withdrawal) a day to the bidding day.

There is really no easy way to re-invest thru stanbic, however, if you have surplus amounts in the account to cover it, you can go like the example below

Let us say, you intend to invest N1m face-value at (estimated) bank rate of 18% with a tenor of 364 days

Fill a form for N1,220,000
This is N1,000,000 + N180,000 (i.e. the discount on N1m) + N40,000 (compounding discount on subsequent re-investments till discount get to zero)

Stanbic will freeze N1,220,000 on your account a day to bidding day without debiting you.

A day after the bidding, your account will only be debited with N1,000,000 and other minor commissions.

At maturity, you will be credited with N1,220,000.

Note that your yield is now 22% and not the 18% discount rate. This is called true yield when you reinvest discount at the same rate and tenor as the principal.

NL1960:
Please can you provide the statistical formula?. I will like to store it for future use.

2n2k:
Note that stanbic doesn't debit you until your bid is successful and will only debit you with the discounted amount only.

However, it will freeze the face-value of your bid (though still in your account but not available for withdrawal) a day to the bidding day.

There is really no easy way to re-invest thru stanbic, however, if you have surplus amounts in the account to cover it, you can go like the example below

Let us say, you intend to invest N1m face-value at (estimated) bank rate of 18% with a tenor of 364 days

Fill a form for N1,220,000
This is N1,000,000 + N180,000 (i.e. the discount on N1m) + N40,000 (compounding discount on subsequent re-investments till discount get to zero)

Stanbic will freeze N1,220,000 on your account a day to bidding day without debiting you.

A day after the bidding, your account will only be debited with N1,000,000 and other minor commissions.

At maturity, you will be credited with N1,220,000.

Note that your yield is now 22% and not the 18% discount rate. This is called true yield when you reinvest discount at the same rate and tenor as the principal.

NL1960:
Please can you provide the statistical formula?. I will like to store it for future use.

Desanta:
(Principal x 100)/100 - interest or bid rate.

The above gives you an idea of the amount to have in you account.

NL1960:
Please cross check this your formula.

If we apply this your formula on the example 2n2k gave above, we will arrive at:

(1,000,000 * 100)/100 - 18 = 1,000,000 - 18 = 999,982

This is not what 2n2k is getting with his example above.

unite4real:
That formular for NL1960 is perfect. you are so wrong in your calculation.

it should be (1,000,000 * 100)/ (100 - 18)
100,000,000/82 = 1,219,512

MOM1:
Does anyone know if today iks the BID day or tomorrow?

Gavrelino123:
seems i will transfer my academic nick name "001" to you....#2n2K#

PhilJames:
Hello house,

Please can the 40k+ gotten from an investment of 500k for 182 days be reinvested in the same bid?

Maybe using the face value?




Cc: 2n2k

Desanta:
(Principal x 100)/(100 - interest or bid rate).

77365052The above gives you an idea of the amount to have in you account.

unite4real:
That formular for NL1960 is perfect. you are so wrong in your calculation.

it should be (1,000,000 * 100)/ (100 - 18)
100,000,000/82 = 1,219,512

ugoelvis1:
Is this compound interest approach applicable to other banks like first bank? Or only on stanbic bank alone

2n2k:
Yes but the hypothetical example was made using a year tenor. The effect for 182 days will be roughly halved in absolute amounts.

TONY56:
You goofed.
I am not a Banker,
I am a Mechanical Engineer,
I am a retired Civil Servant,
Not a single member of my family works with Stanbic.
My only account with Stanbic is a Savings account which I opened just on 7th of June this year specifically for Treasury Account because they are the BEST for Primary Market and are next to First Bank that i have been Banking with for about 30yrs.
I also have my Retirees Account with Stanbic
.
I am only in love with the Bank bacause of their services and performance with very robust returns on investments (ROI).

If you are not aware, Stanbic is an international Bank and it's the 2nd best performing Bank in Nigeria after GTB and their share holders smile home yearly while as PFA (Pension Fund Administrator), they are second to none in this country with the highest returns on Pension Contribution Savings and Retirees Pension Account.

So I can't but sing their praise because it's "7up" I.e "The difference is not only clear, but very clear"

2n2k:
Note that stanbic doesn't debit you until your bid is successful and will only debit you with the discounted amount only.

However, it will freeze the face-value of your bid (though still in your account but not available for withdrawal) a day to the bidding day.

There is really no easy way to re-invest thru stanbic, however, if you have surplus amounts in the account to cover it, you can go like the example below

Let us say, you intend to invest N1m face-value at (estimated) bank rate of 18% with a tenor of 364 days

Fill a form for N1,220,000
This is N1,000,000 + N180,000 (i.e. the discount on N1m) + N40,000 (compounding discount on subsequent re-investments till discount get to zero)

Stanbic will freeze N1,220,000 on your account a day to bidding day without debiting you.

A day after the bidding, your account will only be debited with N1,000,000 and other minor commissions.

At maturity, you will be credited with N1,220,000.

Note that your yield is now 22% and not the 18% discount rate. This is called true yield when you reinvest discount at the same rate and tenor as the principal.

NL1960:
Nice one. Is there a formula for achieving this such that when you slot in any amount, you arrive at a figure.

tunene66:
Then do the computation yourself and instruct what to debit. For instance if you have =N=1M and the rates is about 18% for 364days. you can ask that indicate willingness to buy =N=1,215,000 (FACE VALUE) Treasury bills of 364days tenor at 18%

TONY56:
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You just nailed it.
That's how I do it with Stanbic cause they don't do compounding interest at all and it's not in their form.
All you need to achieve this is to be able to do some simple Arithmetic

2n2k:
1. They will freeze before the bidding date and debit you with the discounted principal a day after the bidding date (not maturity date) if you are successful. The discount itself will not be debited. At maturity, you will be credited with the face-value.

2. A long process but shortened there
1st discount reinvestment: 180,000 x 18% = 32,400. New principal =180,000-32,400 = 147,600
2nd discount reinvestment: 147,600 x 18% = 26,570. New principal =147,600-26,570 = 121,030
3rd discount reinvestment: 121,030 x 18% = 21,785. New principal = 121,030-21,785 = 99,245

If you continue with the calculations, the new principal and discounts receivable will continue to decrease till you get zero. At that point, if you add all the discounts, you will get N220,000 in total. If you deduct the initial N180,000 from it, you get N40,000. Of course, in the exam hall, there is statistical formula to shorten the steps, but many people may be put off by that. So that is the lay-man process.

3. Since the whole investment is N1m (after reinvestment of discounts), the face value is no longer N1m but N1m plus the 220,000 interest reinvested, so the face value due at maturity is N1,220,000

walexlo78:
Hi, sure you do this with Stanbic? which branch please? I was at Ogba branch yesterday but they did not allow it because they insisted that the amount in my account must match the face value written on the TB application. Please let me know the branch where this is possible.

Ovie2011:
I applied for TB of 364 days with First bank since on Monday but I have not been debited. Is this normal? Because this is the first time I am doing TB and I feel maybe my form was forgotten or something. Is this how it is done?

Amypriti:
Hello guys,

Please which is better and also yields higher interest
Treasury bills PR stanbic ibtc mutual funds

TONY56:
It's like you don't really understand what many of us have been explaining about how to compound your interest with Stanbic.

What we have been explaining is that Stanbic does not allow compounding of interest but you can do your simple arithmetic of what you want yourself and be sure that you have up to the face value of what you will get at the end of your tenor in your account so that when you will be debited, it will only be the discounted amount.

A good example is that of someone who wants to compound his interests on investment of 1,000,000 with the assumption of 18%. After doing his own calculations on compounding, he arrives at N1,220,000 to be collected at the end of the tenor. So, at Stanbic what he needs to do is to leave at least N1,220,000 face value in his account and write same amount on his form for the investment instead of N1,000,000 but when he is to be debited, Stanbic will debit ONLY N1,000,000 and at the end of 364days, he will be credited with N1,220,000 instead of N1,000,000.

I hope this explains it all to you?.

TONY56:
You have been very wonderful with the way you tried to explain this compounding interest of a thing to people BUT it appears you made a mistake in paragraph 2.

Your calculation on the 1st discount reinvestment is correct but after re investing the N180,000 at same 18%, your next principal should be the discount you get on the N180,000 which is N180,000-N147,600=N32,400 and not N180,000-N32,400.

So, 2nd discount reinvestment should be N32,400 x 18% =N5,832.

your 3rd discount reinvestment will be N5,832 × 18% =N1,049.76.

Your 4th discount reinvestment will be N1,049.76 × 18% =N188.9568.

Your 5th discount reinvestment will be N188.9568 x 18% =N34.81.

Up to this point, we already have N(32.400 + 5.832 + 1.049.76 + 188.9568 + 34.81) =N39.504.729. So, when you continue like that till you get zero and add all the interests together, you'll get very close to the N40,000 we are talking about and adding it to the initial interest of N180,000 gives total compounded interest of N220,000 on investment of N1,000,000 for one year at the rate of 18% and people should note that they have decided to postpone the collection of their interests by so doing and that's why they would be getting N1,220,000 at the end of the tenor of 364days instead of N1,000,000 that others who received their N180,000 up front will receive.

As I said earlier, you did a beautiful job but I think somewhere along the line, you just missed that step.

Bravo!!!

Gavrelino123:
It's very clear and explicit that your TB wasn't treated..
Probably they saw you as a new-biz or your Bid wasn't successful.....
Most times they do it intentionally in other to frustrate your effort.....
Banks don't like customers investing on TB....they are only trained to encourage Fxed Deposit and discourage TB..
Go back to them and open your eyes...,let them know you are old in the system,you will see the repentance that they will display, probably they will look for an excuse to cover up their lies..
My Accounting office that use to call me her love and sweet heart,is now against me after her plan to discourage me from TB failed......She doesn't smile with me anymore...but who cares..lol ..this is about me not her...Greedy fellow...
She was smiling with me then because she saw me as someone who's naive and easily manipulated..
I'm always very angry remembering how this lady used me...
Go and find out the reason and make sure you open your eyes for them......Nothing like being calm here..

walexlo78:
Dears,

I am not sure STANbicIBTC will allow you to state a Face value that is more than the fund you have in your account. Some months back this is the way I always bid with GTB because I do not always need the interest sitting in my account and also do not have time filling new forms over and over for reinvestment and also because of my preference for PM which occurs only every two weeks. But GT does not allow that again.

I have moved to Stanbic but they also did not allow that principle even though they will only debit your account with the discounted amount. Because as you are dropping your application they are matching the face value on your form with the amount in your account which must not be less than that face value. The explanation is that prior to bidding, they debit their own internal books the total face value amount on your form thus if you do not have that amount in your account, there will be issue with the accounting "DR & CR thing".

However, I personally love that principle of compounded interest bidding. if anyone still succeeds with this in any bank, please let me know.

Ovie2011:
Is it late for the primary market since today is the auction date? Can I still get 364 days via primary market?

TONY56:
You have been very wonderful with the way you tried to explain this compounding interest of a thing to people BUT it appears you made a mistake in paragraph 2.

Your calculation on the 1st discount reinvestment is correct but after re investing the N180,000 at same 18%, your next principal should be the discount you get on the N180,000 which is N180,000-N147,600=N32,400 and not N180,000-N32,400.

So, 2nd discount reinvestment should be N32,400 x 18% =N5,832.

your 3rd discount reinvestment will be N5,832 × 18% =N1,049.76.

Your 4th discount reinvestment will be N1,049.76 × 18% =N188.9568.

Your 5th discount reinvestment will be N188.9568 x 18% =N34.81.

Up to this point, we already have N(32.400 + 5.832 + 1.049.76 + 188.9568 + 34.81) =N39.504.729. So, when you continue like that till you get zero and add all the interests together, you'll get very close to the N40,000 we are talking about and adding it to the initial interest of N180,000 gives total compounded interest of N220,000 on investment of N1,000,000 for one year at the rate of 18% and people should note that they have decided to postpone the collection of their interests by so doing and that's why they would be getting N1,220,000 at the end of the tenor of 364days instead of N1,000,000 that others who received their N180,000 up front will receive.

As I said earlier, you did a beautiful job but I think somewhere along the line, you just missed that step.

Bravo!!!

NL1960:
Please can you provide the statistical formula?. I will like to store it for future use