- Treasury bills are short-term government debt that you buy at a discount and redeem at full value.
- Common tenors are 91, 182 and 364 days, and yields change at each auction.
- Compare the yield with inflation, and consider access to your money before you lock it.
The Short Answer
A treasury bill, or T-bill, is a short-term loan you make to the Federal Government. You buy it for less than its face value and receive the full face value when it matures, and the difference is your return. It is widely viewed as one of the lower-risk investments in the local market, but returns are not fixed forever, and inflation can reduce what your money can buy.
How a T-Bill Works
Suppose you buy a one-year bill with a face value of N1,000,000 at a discount price. At maturity you receive N1,000,000. The gap between what you paid and N1,000,000 is your gain. The discount rate quoted at auction is not the same as the true yield, which is higher because you earn on the amount you actually paid. Ask your platform to show the true yield in plain numbers.
Tenors and Auctions
- Typical tenors are 91, 182 and 364 days.
- The Central Bank of Nigeria runs regular auctions, and rates move with market conditions. Market reports in August 2026 put yields in the high teens in percent terms, but check the latest auction results before deciding.
- You can also buy and sell in the secondary market, but prices can vary.
Where to Buy
Through a bank, a licensed stockbroking firm or a regulated investment platform. Confirm the provider is registered with the Securities and Exchange Commission, ask about fees and minimum amounts and make sure the bill is held in your name.
Risks and Trade-Offs
| Risk | Plain meaning |
|---|---|
| Inflation | If prices rise faster than your yield, your real return is low |
| Liquidity | Getting cash before maturity may mean selling at a lower price |
| Reinvestment | When the bill matures, new rates may be lower |
| Platform risk | Use only regulated providers |
Where It Fits in Your Plan
T-bills suit money you will not need for a few months or a year. Keep an emergency cushion first: see how many months of expenses to save. For longer goals, compare with money market and mutual funds, index funds and ETFs and micro-investing. Beware of schemes promising far higher returns: read how to spot investment scams.
Action Checklist
- Build an emergency fund first
- Check the latest auction yields
- Confirm your platform is regulated
- Ask for the true yield and all fees
- Choose a tenor that matches when you need the money
- Compare the yield with inflation
