Investment Opportunities in the FGN Savings Bonds


Monday, August 13, 2018 /2:20PM / FSDH Research

In March 2017, the Debt Management Office (DMO) introduced the Federal Government of Nigeria Savings Bond (FGNSB) to provide an avenue for low-income earners to earn consistently good returns over time. The FGNSB provides an investment opportunity offering attractive returns with low investment risk. It is an initiative of the FGN to encourage a culture of national saving, which is amongst the lowest of certain selected countries. The FGNSB also helps to diversify the funding sources of the government. The minimum investment in the Bond is N5,000 while the maximum investment is N50million. Investors can purchase the FGNSB through a stockbroker who is accredited by the DMO.


Proshare Nigeria Pvt. Ltd.

The FGNSB is a more attractive investment option than a savings account as it is exempted from all forms of tax and offers a higher interest rate than a savings account. Data from the Central Bank of Nigeria (CBN) shows that the average interest rate on savings deposits was 4.10% between March 2017 and June 2018.

Proshare Nigeria Pvt. Ltd.

An additional benefit of the FGNSB is its relative liquidity as investors can trade the Bond on The Nigerian Stock Exchange (NSE) if they wish to sell before maturity. Investment in the FGNSB may be used as collateral to borrow money in any financial institution in Nigeria FSDH Research believes investing in the FGNSB is a good avenue for low-income earners to build wealth over a long period. Our illustration shows that an investment of N100,000 in the FGNSB could grow to N1,702,099.02 in 25 years. This is possible if the interest earned and the maturing principals are reinvested at an interest rate of 11.50% annually, payable every quarter.


Proshare Nigeria Pvt. Ltd.

Proshare Nigeria Pvt. Ltd.

Related News


1.       Bond Yields Spike to 8-Month High as RM offshores cut down on NIGB Holdings amidst EM Rout

2.      Invest in FGN Monthly Bond Auction – August 2018

3.      Markets trade flat as CBN sells OMO to manage maturities

4.      Bond Market Bounces Back from Previous Day Selloff

5.      FirstBank Redeem $300million 8.25% Subordinated Notes

6.      Bond Yields Spike in Panic Driven Session

7.      Sterling Bank Plc Set to Issue Up to N35bn Series 6 and Series 7 Commercial Paper

8.     Funding Rates Tick Higher as Banks Fund for CBN SMIS

9.      Expected System Liquidity Boost to Sustain Bullish Performance

10.  August 2018 FGN Savings Bonds Offer for Subscription

11.   Fixed Income Market Monitor- Average Bond Yield Fell by 3bps to Close the Week At 13.97%

12.  Bond Yields Tick Higher as Offshore Players selloff on the Mid to Long End

13.  Lafarge Africa Plc Series 7 Commercial Paper Closes Today

14.  CBN Mops up Excess OMO Inflows as SLF Window hits a Record Zero Patronage

15.   Lafarge Africa Plc Series 7 Commercial Paper Now Open

16.  PMA Rates Trend lower as Market Players Oversubscribe the 1-yr bill by 175%

17.   Funding Rates expected to Trend Lower as c.N375bn FAAC Inflows hit the System

18.  Nigeria’s Debt Composition is Now External 30% Domestic 70%- Pat Oniha, DG DMO

19.  Liquidity Levels May Drive Rates Southwards Amid PMA This Week

Related News