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Fixed Income Investment: The Ultimate Guide on How to Invest in FGN Bonds -->

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Fixed Income Investment: The Ultimate Guide on How to Invest in FGN Bonds

Invest With Confidence In Government Savings Bonds!  Government Bonds provide the safest form of investment opportunity, with minimal risk, so that you can invest with confidence. Investing in this FGN Savings Bond is a safe and secure fixed-income investment backed by the full faith and credit of the Federal Government of Nigeria. Get guaranteed returns with quarterly coupon payments and liquidity on the Nigerian Stock Exchange.

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🎯 Table Of Contents 🎯

Further Study:  How To Get Out Of Financial Crisis

Federal Government of Nigeria (FGN) Savings Bond

Under the Debt Management Office (Establishment) Act of 2003 and the Local Loans. (Registered Stock and Securities) Act, CAP. L17, LFN 2004.

DEBT MANAGEMENT OFFICE on behalf of the FEDERAL GOVERNMENT OF NIGERIA announced the offers for Subscription and is authorized to receive applications for the Federal Government of Nigeria Savings Bond as follows

  • 2-Year FGN Savings Bond due October 12, 2024,, at the rate of 11.382% per annum
  • 3-Year FGN Savings Bond due October 12, 2025, at the rate of 12.382% per annum
  • Opening Date: October 4, 2022
  • Closing Date: October 7, 2022
  • Coupon Payment Dates: January 12, April 12, July 12, and October 12

Summary Of The Offer

  • ISSUER: Federal Government of Nigeria (FGN)
  • UNITS OF SALE: N1,000 per unit subject to a minimum Subscription of N5,000 and in multiples of N1,000 thereafter, subject to a maximum subscription of N50,000,000.

Security Of Investment

Image showing how safe it is to invest in savings bonds and why you should invest for secured and fixed return on investment

The FGN savings Bond is backed by the full faith and credit of the Federal Government of Nigeria and charged upon the general assets of Nigeria.


What Is A Bond?

A bond is a contract of debt with which an investor loans money to a borrower, usually the Government (in this case FGN) or corporate organization. The investor or holder of the bond is the lender. When you purchase a bond, you are lending money to a Government (Federal, State, Local Government Council, and Federal/State Agency) and Corporation, known as the issuer. The Government uses the proceeds from the bonds issued to fund budget deficits or to fund infrastructure projects in the economy. When you purchase a bond, in return the issuer promises to pay you a specified rate of interest (the coupon) during the life of the bond and to repay the face value of the bond (the principal or the original amount invested) at maturity.

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FGN Bonds are debt securities (liabilities) of the Federal Government of Nigeria (FGN) issued by the Debt Management Office (DMO) for and on behalf of the Federal Government. The Federal Government of Nigeria has an obligation to pay the bondholder the principal and the agreed interest as and when due, as the Coupon Payment Dates stipulate.

What is a Coupon?

A coupon is a periodic interest, annual or semi-annual (in this case quarterly) which the issuer pays to the bond holders, which is generally fixed at issuance and expressed as a percentage of the bond’s face value. This is why bonds are often referred to as fixed-income instruments.

What is a Yield?

A bond yield is the amount of return an investor will realize on a bond or the current market interest rate for bonds. The yield of a bond is inversely related to its price, as the market price of a bond increases, the yield falls, and vice versa.

What is the Maturity Date?

The maturity date is the day on which the issuer repays the principal amount or face value plus all outstanding accrued interests. The issuer has no more obligations to bondholders after repayment on the maturity date.

What Is The Difference Between Bonds And Stocks?

The main difference between stocks and bonds is that stocks represent an ownership interest in the issuing entity while bonds are a form of debt in which the issuer promises to pay the principal amount at a specific date. Another major difference is that stocks pay dividends to the owners only if the issuer declares profit. In the case of bonds, the issuer of a bond is obligated to repay the principal amount at the maturity date and also pay interest to the bold holders at a set interval (annual or semi-annual). If you buy a bond and hold it to maturity, you know exactly how much you are going to get back. That is why bonds are also known as ‘fixed-income’ securities. The buyer of stocks or shares in a company has purchased part of the equity and becomes the part–owner. He is only entitled to dividends declared by the company when it makes a profit.

Attractiveness/Benefits of Investing In FGN Savings Bond

  • It is a risk-free investment and can serve as an investment for retirement.
  • Your earnings are exempted from tax liabilities.
  • It provides relatively high and stable returns when compared to conventional bank deposits.
  • The principal element, which is to be collected at maturity, can be used as collateral for securing credit facilities 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.
  • It qualifies as liquid assets for banks in the estimation of their liquidity ratios by the CBN.

Image showing how to take advantage of DMO FGN saings bond this october with just 5000 naira

Read: How To Build Wealth From Nothing


  • The information you just read was sourced from the DMO official website – Here.  
  • This must not be construed as financial advice from Noble Solutions. you are expected to consult your financial adviser or banker if need be before making any investment decision. Also, read our official disclaimer Here.
  • Never invest any money you can not afford to lose.
  • This is a long-term investment so do not invest money you don't have the need for in the immediate time.
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