Can one tell me the risks involved with Treasury Bills Investment?

PraiseDLord:
Why can't other banks host their t.bills on a portal for investors to decide like Access Bank's tbill.ng site?
'Cos, you don't even need to visit any branch of Access Bank b4 you can invest in treasury bills which I found more convenient

I wonder why Access bank put a cap of 5 million naira max per slot. So one has to do multiple slots if depositing above 5M

Hello Bosses...Does it really take long for terminated TBs to drop on ones account? I recently terminated a bill that was rolled over to in April. It's been over a month now...the payment has been effected on my account. Is it supposed to be this long? So someone can't urgently need his money again? Lol

Damolux01:
Hello Bosses...Does it really take long for terminated TBs to drop on ones account? I recently terminated a bill that was rolled over to in April. It's been over a month now...the payment has been effected on my account. Is it supposed to be this long? So someone can't urgently need his money again? Lol

Never, mine has always been same day value.
Why should a discounted instrument that is very liquid take such a time?
It's same day please. Worst case, the bank buys it back to increase its regulatory CRR.

PraiseDLord:

Never, mine has always been same day value.
Why should a discounted instrument that is very liquid take such a time?
It's same day please. Worst case, the bank buys it back to increase its regulatory CRR.

This woman is playing games with me...Imagine her telling me that it's not the Bank that would liquidate it and that theres is just to send request to CBN or smth. Seems she wants me to call her bluff!

Damolux01:
This woman is playing games with me...Imagine her telling me that it's not the Bank that would liquidate it and that theres is just to send request to CBN or smth. Seems she wants me to call her bluff!

Which bank is this?

chigo4u:

I wanted to ask this too. Is it not illegal for bank to to pay upfront interest in tbills? If its true then I need to know the banks not paying upfront interest so I avoid them

I think you're missing something and the young man that complained about sterling bank or another bank not paying interest upfront.
You need to know how treasury bills works.
T.bills are discountable instruments and they are so called because the investor gets its interest upfront. This means that the interest promised on a T-bill instrument is payable on the very day the investment commences. For instance, if a T-bill promises a 10.0% rate per annum and an investor wants to put in N1,000,000, the investor pays only N900,000 from the day of investment but gets back N1,000,000 at maturity. i.e. only N900,000 will be debited from your account on the 1st day of investment, while at maturity, you'll get back N1m. Hence, the N100,000 left in your account which represents the difference btw the investment value you requested from your banker and the amount actually debited from your account is the upfront interest that you've earned from the very 1st date of investment provided you hold till maturity. So, it's not that your banker will credit your account separately with the interest on the day of purchase.
God bless you

PraiseDLord:

I think you're missing something and the young man that complained about sterling bank or another bank not paying interest upfront.
You need to know how treasury bills works.
T.bills are discountable instruments and they are so called because the investor gets its interest upfront. This means that the interest promised on a T-bill instrument is payable on the very day the investment commences. For instance, if a T-bill promises a 10.0% rate per annum and an investor wants to put in N1,000,000, the investor pays only N900,000 from the day of investment but gets back N1,000,000 at maturity. i.e. only N900,000 will be debited from your account on the 1st day of investment, while at maturity, you'll get back N1m. Hence, the N100,000 left in your account which represents the difference btw the investment value you requested from your banker and the amount actually debited from your account is the upfront interest that you've earned from the very 1st date of investment provided you hold till maturity. So, it's not that your banker will credit your account separately with the interest on the day of purchase.
God bless you

Thanks for the clarification. SO If I write that I want to invest 1 million for instance and have just 900 thousand in my account, will the bank proceed with the investment (since thats what they'll take anyway) or I must have the 1 million complete in the account before the bank can proceed with the investment. This is a little bit confusing lol

chigo4u:

Thanks for the clarification. SO If I write that I want to invest 1 million for instance and have just 900 thousand in my account, will the bank proceed with the investment (since thats what they'll take anyway) or I must have the 1 million complete in the account before the bank can proceed with the investment. This is a little bit confusing lol

It depends on the bank. Stanbic won't accept but Diamond and GTB will.

PraiseDLord:

Which bank is this?

First Bank bro. I'll have to walk into the Managerial office this morning.

zamirikpo:


We r waiting for the 2019 Q1 calender......i hope it comes out early enough.

How early does it normally come out?

PraiseDLord:

Which bank is this?

What I wanted to ask has been answered. Thanks.

Killing it softly. You nailed it

PraiseDLord:

I think you're missing something and the young man that complained about sterling bank or another bank not paying interest upfront.
You need to know how treasury bills works.
T.bills are discountable instruments and they are so called because the investor gets its interest upfront. This means that the interest promised on a T-bill instrument is payable on the very day the investment commences. For instance, if a T-bill promises a 10.0% rate per annum and an investor wants to put in N1,000,000, the investor pays only N900,000 from the day of investment but gets back N1,000,000 at maturity. i.e. only N900,000 will be debited from your account on the 1st day of investment, while at maturity, you'll get back N1m. Hence, the N100,000 left in your account which represents the difference btw the investment value you requested from your banker and the amount actually debited from your account is the upfront interest that you've earned from the very 1st date of investment provided you hold till maturity. So, it's not that your banker will credit your account separately with the interest on the day of purchase.
God bless you

Tellemall:


Sorry to quote you for something else.

You seem know a lot on the subject, so I want to ask you about the next auction of TBs.

I'm seeing a lot of Q1 responses, but a banker I contacted sounds as if it will hold again this year. I don't know what to believe again because the bankers all sound confused and misinformed. They don't even know the discount rates past and present.

If next year, do you know when it will hold? February? Clueless here.

1st quarter starts December and not January, it's every other 2 weeks except communicated otherwise for unforeseen reasons. I stand to be corrected. Thanks.

Barrytone:


1st quarter starts December and not January, it's every other 2 weeks except communicated otherwise for unforeseen reasons. I stand to be corrected. Thanks.

So we can expect it early in January?

condomuser:

This is for Eurobonds dollar denominated mutual funds ?

Yes, could be lower though if I am being conservative I will day 5-9% per annum.

Internetboy:



Good info you have here. I have dom account with Stanbic. How is the dollar fund interest rate calculated. Do you have idea of the maximum investment amount one can do.

I want to venture into this kind of investment, any little info you can give to assist will be appreciated.

I don't know how Stanbic does theirs, but the rates fluctuate just like other mutual funds do. If you speak to their customer care they will tell you how this is done.

Internetboy:



Also I read sonehwere that, Stanbic charges 20% of the profit (interest rate)... Its this true?

Erm. I am not so sure. Call their customer care and ask though. I suspect 1-2% off the % of the interest. So could that be 20% of profit? Probably. But before you quote me, please talk to their customer service.

If the 1Q 2019 calender isn't out by the end of the week , then it's safe to say that there would be no more TB auctions this year.

Secondary market will suffice.

Market Expect N551b Inflow from Maturing Treasury Bills
https://businesspost.ng/2018/12/10/market-expect-n551b-inflow-from-maturing-treasury-bills/

Q3 201: Nigeria's Economy Expands After 1.81% Rise in GDP
https://businesspost.ng/2018/12/10/q3-2018-nigerias-economy-expands-after-1-81-rise-in-gdp/

chigo4u:

t (since thats what they'll take anyway) or I must have the 1 million complete in the account before the bank can proceed with the investment. This is a little bit confusing lol

Absolutely!
That's the beauty of treasury bills; and it's called interest backend!
So you absolutely can buy a N1m portion with only N900,000 in your account. All you've done is that you've converted your interest from upfront to backend by compounding same and investing that.
I've done this severally especially when I don't have immediate need for cash.
Remain blessed!

unite4real:


It depends on the bank. Stanbic won't accept but Diamond and GTB will.

How? Why not?
You need to know your right!
The fact that the customer care officer you met turned you down does not mean the bank don't do it! You should have educated the person straightaway!
The truth is that bankers don't know it all! That's why you have some of us with core expertise in Finance both as a course of study in first & higher degrees and also as a practical on the job experience in the industry.

PraiseDLord:

Absolutely!
That's the beauty of treasury bills; and it's called interest backend!
So you absolutely can buy a N1m portion with only N900,000 in your account. All you've done is that you've converted your interest from upfront to backend by compounding same and investing that.
I've done this severally especially when I don't have immediate need for cash.
Remain blessed!

Great, thanks for the info.

15% bitch

What do ya mean? Is this a bait?................waiting for response

chloride6:
15% bitch

ozymes:
What do ya mean? Is this a bait?................waiting for response

Longest tenor for OMO today

Guns are blazing right now!

chloride6:


Longest tenor for OMO today

Please how do i check the rates of each bank's Tbill instrument? Whats banks have the best rates at the moment?

ozymes:
What do ya mean? Is this a bait?................waiting for response

it is the Federal government SUKUK BOND. 7 years 15.7...% per annum.

Cation:
it is the Federal government SUKUK BOND. 7 years 15.7...% per annum.

tbills interest fluctuates and while this is fixed throughout the duration. Investing 2.1m in the bond while compounding the annual interest will makes your money grow to 6.2m by maturity.
Among many reason the rich keep getting richer.

Ibrahim505:
tbills interest fluctuates and while this is fixed throughout the duration. Investing 2.1m in the bond while compounding the annual interest will makes your money grow to 6.2m by maturity.
Among many reason the rich keep getting richer.

Simple truth

What is the security compared to tbill?

Ibrahim505:
tbills interest fluctuates and while this is fixed throughout the duration. Investing 2.1m in the bond while compounding the annual interest will makes your money grow to 6.2m by maturity.
Among many reason the rich keep getting richer.