What is FGN savings bond?

A FGN savings bond is a bond issued by the Debt Management Office on behalf of the Nigerian government. The bond is tailored and targeted at retail investors and includes a guaranteed interest payment and repayment of the principal.

Why is the government issuing a retail bond?

The government is issuing savings bonds targeted at ordinary Nigerians of all income groups, giving them the opportunity to earn an income through saving and investing. The bond is also expected to help promote the savings culture of Nigerians. Most Nigerians are thought not to save in banks because of very low-interest rates.


What are the attractiveness/benefits of FGN Bonds to the investors?

-It is a risk-free investment.
-The income earned (interest payments) are tax exempt.
-It provides relatively high and stable returns when compared to the conventional bank deposit.
-The principal element which is to be collected at maturity can be used as collateral for securing loans from financial institutions such as banks.
-Bondholders that want cash can trade the bonds on the floors of the NSE and FMDQ OTC Securities Exchange for immediate cash before maturity.


What are the risks?


FGN Bonds are often said to be risk-free because the Federal Government hardly defaults on debt repayments especially if it is a Naira denominated debt. However, being a bond, there are a few risks, should you decide to sell before maturity.

How much can I invest?

Retail investors looking to invest in the FGN savings bond only need a minimum of N5,000 to invest. Subsequent investment over N5,000 will be in multiples of N1,000. Meaning that you cannot invest N5,500 or N12,700. It’s either N6,000 or N13,000 or N30,000. The maximum amount a single retail investor can invest in the FGN Bond is N50m.

Where can I buy it from?


Simply visit "troveapp.co" or "play.google.com/store/apps/details?id=co.troveapp.android" to get the application. With the app you can invest in 100+ stocks listed on the Nigerian Stock Exchange & also Government bonds.

What is the tenor of the loans and what is the interest rate?

The bonds have a tenor of two and three years respectively. Meaning that you can either invest in an FGN savings bond with a duration of two years or one with a duration of three years. The interest rates over the last year typically range from 12% per year to 14% per year.


How will the interest and principal be paid?

The interest will be paid quarterly into your bank accounts while the principal will be paid at maturity (the end of the tenor, two or three years) depending on what duration you subscribed to.

Will it be issued monthly?


Yes, the FGN savings bond is issued monthly.

What if I decide to sell before maturity?

You need not hold on to the bond until maturity. If you need cash anytime during the duration of the bond, you can sell your bond in exchange for cash. However, the portion of the interest that you are not entitled to earn because you have sold will not accrue to you any longer. For example, if you buy March 13 and sell August 13, 2019, because you cannot wait until March 2021 (after two years) to get your principal, you will only be entitled to the interest earned between March 13 and August 13, 2019.

However, note that should you wish to sell before maturity, you might pay a transaction fee. Also, because it is a bond, the price you get might be more or higher depending on the market value of the bond.


What is the difference between FGN savings bonds and treasury bills?

-Unlike treasury bills, FGN savings bonds have a duration of between two and three years. Treasury bills are not more than one year with shorter tenors of 91 days and 182 days.
-Treasury bills rates are determined by the forces of demand and supply. The DMO says the FGN saving bonds rates will be determined by them.
-Treasury bills interest rates are paid up front. For example, if you invest in treasury bills today, they will pay you all your interest today. For the FGN savings bonds, it will be at the end of the first quarter.
-Unlike FGN savings bonds, treasury bills are not sold in the stock market
-The DMO has also now said that treasury bills can no longer be sold to retail investors.

How would investor confirm that FGN Savings Bond has been purchased or sold as requested?

CSCS alerts investors when a sale or purchase is done on their accounts through their mobile phones.

FGNSB holders can also transfer their bond to their children on the exchange through nominal transfer.

How can I be aware of the forthcoming Bond issues?

The DMO conduct Monthly Auction on behalf of the Federal Government of Nigeria and the notice is placed in National Dailies and the DMO Website, 7 days prior to the date.

Quarterly FGN Bond Issuance Calendar is on the DMO Website.

Also, the Trove app lists all bonds when they are available for purchase with interest rates and tenors displayed to you.

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