What are Treasury Bills?
Simply put, you borrow the government your money and they pay you back with interest after a certain period of time.Treasury bills are backed by the guarantee of the Federal Government.
This is how Treasury Bills works
The Federal Government issues treasury bills at discounted prices for maturity periods between 91 and 364 days. At the end the selected maturity period, the government buys the bills back at full price. For example, let’s say, you buy a 182-day 200,000 treasury bill at a discounted rate of 180,000.
Note that you will not get any alerts or notifications on your investment until the end of your tenure, so you need be patient. You only get a debit notification when the money is taken out of your account, and a credit notification when the money is returned at the end of the tenure.
Where can I purchase Treasury Bills?
Treasury Bills are sold at commercial banks and official agents such as merchant banks, so you can walk into any of your bank’s branches and tell a cashier you would like to buy Treasury Bills.
What is the minimum purchase amount for Treasury Bills?
Some banks offer a minimum of 50,000, while some offer a minimum of 500,000. Find out from your bank officer or walk into your bank’s branch to find out.
How long can I invest for?
There are 3 tenures available: 91 days, 182 days or 364 days.
What are the advantages and disadvantages of investing in Treasury Bills?
There are many advantages to investing in treasury bills.
The biggest advantage of treasury bills is that they offer high interest rates, in fact right now, treasury bills have the highest interest rates of any investment type.
Also as Treasury Bills are based in full faith of the Federal Government, they are considered one of the most secure investments to make. They can also be used as collateral, and are accepted by all banks.