As Nigeria’s next Treasury Bill auction approaches on August 6, 2025, savvy investors are eyeing this government-backed, short-term debt instrument for its attractive yields and rock-solid security. Whether you are a beginner looking for a safe place to park your savings, a professional balancing a diverse portfolio, or a retiree seeking predictable returns, Treasury Bills offer a compelling blend of liquidity, government guarantee, and competitive interest rates. In this guide, we will show you how to subscribe in both primary and secondary markets, using banks, fintech apps, or money market funds. We would then compare T-Bills head-to-head with fixed deposits, equities, real estate, and more, so you can decide if they’re right for your financial goals.
Nigerian Treasury Bills (T-Bills) are short-term debt instruments issued by the Central Bank of Nigeria on behalf of the Federal Government. In essence, you are lending money to the government for a fixed period (typically 91, 182 or 364 days). T-Bills are basically sold at a discount. For example, you might pay ₦90,000 today for a ₦100,000 bill (face value). When the bill matures, the government repays you the full ₦100,000, so your ₦10,000 difference is the interest earned. This structure means that T-Bills provide a fixed, predictable return and are backed by the full faith and credit of the Nigerian government, making them one of the safest investment options in the country.
Tenors
T-Bills come in 91-day, 182-day, and 364-day maturities. The longer the tenor, the higher the typical yield (since you lock in your funds longer).
How to Buy
The government auctions new T-Bills regularly (e.g. the next auction on Aug 6, 2025). You can participate through licensed banks or brokers. In the primary market auctions, bids are often in large amounts, running into millions of Naira, usually, N2M for a fix rate and However, to bid at your preferred rate, that is, to have the freedom to set your own specific bidding rate, you need a much larger sum of over N50 million (N50,001,000.00). If you only have the N2 million, your rate might be predetermined or fixed by the auction organiser, and you won't have control over it. The higher amount gives you more flexibility and control.
However, for smaller investors, the secondary market allows buying already-issued T-Bills at prevailing market prices, often with much lower minimums. You can buy T-bills, bonds and stock here (Use Referral Code: 0001276716 to enjoy additional benefits)
Benefits of Nigerian T-Bills
T-Bills offer a compelling package for risk-averse investors. The key advantages include:
Safety and Security:
T-Bills are backed by the Federal Government, so default risk is extremely low. You will get your principal back (face value) at maturity as long as the government meets its obligations. This government guarantee makes T-Bills safer, though it does not guarantee the best rates, but it is safer than most other investments (banks can fail, stock prices can crash, etc.).
Predictable Returns:
You know your return in advance. Since T-Bills are sold at a known discount rate, you can calculate exactly how much you will receive at maturity. For example, if a 1-year bill is sold at a 19.5% yield, you know precisely what you will earn. There are no surprises like fluctuating interest payments or market price swings unless you sell early.
High Liquidity:
T-Bills are highly liquid. Although they mature in up to one year, you can generally sell them anytime on the secondary market through a bank or broker. This means you are not forced to lock up your money for the full term as you can exit early if your plans change (though selling before maturity may yield slightly more or less than originally expected, depending on market rates).
Competitive Yields (Currently):
In mid-2025, Nigerian T-Bill yields remain quite attractive by local standards. For instance, the 364-day (1-year) T-bill yield was about 19.5% in early August 2025, while the 91-day and 182-day bills yielded roughly 16.4% and 17.6% respectively. These rates are substantially higher than typical bank savings or fixed-deposit rates (which range roughly 4–14% annualised for large deposits). In other words, T-Bills often pay more than ordinary savings accounts while offering greater safety.
Drawbacks and Considerations
Despite their appeal, T-Bills have some limitations:
Lower Returns than Riskier Assets:
The flip side of safety is lower potential gain. T-Bill yields, while high for a risk-free asset, are still generally lower than what you might earn in stocks or real estate. For example, Nigeria’s stock market delivered about 30.6% returns year-to-date in 2025, far outperforming T-bill yields. If your goal is high growth and you can tolerate volatility, equities or other high-risk investments may offer bigger rewards than T-Bills.
NOTE: FOLLOWING OUR ANALYSIS (NOT FINANCIAL ADVICE, THOUGH) CAN TAKE YOUR STOCK RETURNS HIGHER THAN THE GENERAL STOCK MARKET ANNUAL RETURNS. AND IT ALL STARTS HERE
Inflation Risk:
T-Bills pay a fixed return, so high inflation can erode your real purchasing power. Nigeria’s inflation has been in the 20–30% range recently, and if inflation exceeds the T-Bill yield, your real return could be negative. In practical terms, the ₦10,000 interest you earn on a bill today might buy significantly less a year from now if prices rise rapidly. This is a concern for any fixed-income investment in high-inflation Nigeria.
Interest Rate Fluctuations:
Yields on new T-Bills depend on prevailing market rates. If the Central Bank raises interest rates, future auctions may offer higher yields (good if you are buying then), but existing T-Bill prices would fall (if you try to sell early). Conversely, if rates fall, future T-Bill yields will be lower, so you might earn less on new purchases. This uncertainty means you can’t predict the exact earnings for successive investments far in the future.
Entry Barriers in Primary Market:
Participating directly in T-Bill auctions typically requires a large minimum investment. This can exclude many retail investors from the primary market. However, secondary-market trading (through a bank/broker) allows smaller investments (often as low as ₦50,000–₦100,000). It just means you may have to pay the current market price instead of bidding in the auction.
Opportunity Cost:
By locking funds in a T-Bill, you miss out on other opportunities that might arise. For example, if the stock market rallies or a better bond issue comes out, your money is tied up (unless you sell the T-Bill early, potentially at a loss or gain depending on rates). You should balance the guarantee of T-Bills against the flexibility of keeping cash or investing elsewhere.
T-Bills vs Other Investment Options
How do Nigerian T-Bills stack up against alternatives? Here is a quick comparison of common choices for Nigerian investors:
Bank Savings / Fixed Deposits:
Bank accounts and fixed deposits are also low-risk, but they usually offer lower interest rates (e.g. roughly 4–14% per year). Bank deposits are insured up to a limit (up to N1 million by NDIC), and you can withdraw on demand (savings) or at short notice (sometimes with a penalty for fixed deposits). In today’s market, T-Bills generally yield higher returns than even the best fixed deposits, making them a better place to park funds if you don’t need immediate access to cash.
Nigerian Stocks (Equities):
The Nigerian stock market can deliver much higher returns (and dividends) than T-Bills. For example, the NGX All-Share Index was up around 30% YTD in 2025, vastly beating T-Bill yields. However, stocks carry significant risk: prices can drop quickly (as we saw in past years), and dividends are not guaranteed. Equities are suited for investors with a higher risk tolerance and a longer time horizon. In contrast, T-Bills are ideal for preserving capital and earning a known return without stock market volatility.
Real Estate / Property:
Investing in land or housing can yield rental income, often in the 5–10% range gross annually (on paper), depending on location and long-term appreciation. Real estate can serve as an inflation hedge because rent and property values often rise with inflation. But it requires large capital, involves ongoing costs (taxes, maintenance) and is very illiquid as selling property can take months. T-Bills require far less upfront cash and can be sold easily if you need funds. So, real estate might suit someone seeking long-term growth and rental income, whereas T-Bills suit someone needing short-term safety and liquidity.
Long-Term Government Bonds:
Nigeria’s Federal Government issues bonds (2–30 year maturities) with periodic coupons. These have similar safety backing as T-Bills, but a longer duration means they pay out over time. Current yields on medium-to-long-term FGN bonds are in the mid-to-high teens (roughly 16–20%), and they pay semi-annual interest. T-Bills are shorter and do not pay interim coupons, but have less price volatility (since they mature quickly). If you want to lock money for years, bonds may pay more, but T-Bills give more flexibility and no reinvestment risk until maturity.
Gold, Forex, Crypto and Others:
Some Nigerians invest in gold, foreign currency (USD, EUR), or cryptocurrencies as alternatives. These can serve as inflation hedges or high-return bets. For example, gold prices or crypto might outperform local inflation. However, they carry currency risk (e.g. if Naira weakens, Dollar assets gain, but vice versa) and/or high volatility, cryptocurrencies swing wildly. T-Bills carry none of that currency or crypto volatility risk. They also don’t require dealing with foreign exchange. So while alternative assets have their place, T-Bills remain one of the most straightforward and stable options for domestic investors.
Conclusion: Who Should Use T-Bills?
Nigerian Treasury Bills are a conservative, predictable investment. They are well-suited for:
- Risk-averse savers who want to preserve capital with a guaranteed return.
- Short-term goals or rainy-day funds, since you can choose terms as short as 3 months and still earn an attractive rate.
- Portfolio diversification: adding T-Bills can offset riskier holdings (like stocks). They act as a “safety anchor” when markets are volatile.
Keep in mind the trade-offs; T-Bills offer high security and liquidity at the cost of capping your upside. With current 1-year yields around 19%, they can reasonably beat most bank deposits and approach inflation, but equities or certain high-yield investments might still outperform over the long run.
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Key Takeaways:
Nigerian T-Bills are short-term government bonds sold at a discount. They are very safe and deliver predictable, fixed returns. Benefits include government guarantee and liquidity. Drawbacks include inflation risk and potentially lower returns than higher-risk assets. Compared to alternatives, T-Bills usually pay more than bank deposits. As an investor or intending investor, you should review current rates and decide if the balance of safety versus return fits your investment and financial goals.
Are you an investor or looking to test the investment waters? What do you think about T-Bill against other investment options? What makes up your investment portfolio? Let us know in the comments below.
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