Treasury Bills (T-Bills) are short-term debt instruments issued by the Federal Government of any country through its Central Bank to raise short-term funds from the general public (private individuals, institutional investors, non-governmental organisations, religious bodies etc.) for the purpose of financing government budget deficit. In Nigeria, T-Bills are issued by the Central Bank of Nigeria (CBN) and it is guaranteed and backed with the full faith of the Federal Government of Nigeria. Treasury Bills are issued at an interest rate often referred to as discount rate.
T-Bills are sold via commercial banks and official agents such as merchant banks, and sales are open to individuals and corporate investors. Some banks offer a minimum of ₦50,000, while some offer a minimum of ₦500,000.Various banks will offer you various stop rates/discount rates, depending on how much you want to invest and how long you want to invest it for so it is a good idea to shop around and not go with the first offer you receive. Do your research and select a bank carefully as people have reported banks offering as low as a 2.4% discount rate. As of recent , unverified informal accounts suggest that Gtbank seems to have the best bid rate.
Treasury Bills are one of the safest forms of investment and are backed by the full faith and credit of the Federal Government of Nigeria
Advantages of Treasury Bills
A good source of steady stream of income
They are a good investment outlet for your free and disposable cash
Treasury Bills are good investments for people who wish to save
They are also tax free
They are very liquid and can be converted to cash quickly
They can be used as a collateral