What Are Nigerian Treasury Bills (NTBs)?
Nigerian Treasury Bills (NTBs) are short-term debt obligations of the Federal Government of Nigeria, issued and managed by the Central Bank of Nigeria (CBN) on behalf of the Debt Management Office. They are among the oldest and most liquid instruments in the Nigerian fixed income market, with issuance dating back to 1959.
NTBs are available in three standard tenors: 91 days (approximately 3 months), 182 days (approximately 6 months), and 364 days (approximately 1 year). They are auctioned weekly by the CBN through the primary market, and subsequently trade on the FMDQ OTC Securities Exchange in the secondary market. As Federal Government securities, they carry very low credit risk — but credit risk is only one dimension, and the full profile is set out below.
Risk profile — Nigerian Treasury Bill
Backed by the full faith and credit of the Federal Government of Nigeria and generally considered to carry very low sovereign credit risk. Investors may still face inflation risk, interest-rate risk, liquidity risk and market-price risk if the investment is sold before maturity.
| Risk type | Assessment | Why |
|---|---|---|
| Credit / default risk | Very low | Issued by the CBN on behalf of the Federal Government — default is considered negligible. |
| Inflation risk | Present | The discount is fixed at purchase; if inflation runs above your net yield, your real return is negative. |
| Interest-rate / market-price risk | Present if sold before maturity | Held to maturity you receive face value. Sold early, the price reflects prevailing yields. |
| Liquidity risk | Low to moderate | A secondary market exists through banks and brokers, but exit pricing is at the dealer’s quote. |
| Reinvestment risk | Present | At maturity you must reinvest at the next auction’s stop rate, which may be well below today’s. |
These are CheckInvestNg’s own qualitative assessments for retail investors, not credit ratings from a rating agency and not personalised investment advice. Risk levels can change with market conditions.
Understanding the NTB Discount Mechanism
NTBs are issued at a discount to face value rather than at par. This is the key mechanic that distinguishes them from coupon-paying bonds. Here is how it works:
- 1.You purchase an NTB with a face value of, say, ₦1,000,000 at a discount rate of 17.66% for 364 days.
- 2.The discount amount = ₦1,000,000 × 17.66% × (364/365) = ₦176,516. This is your interest income, received upfront.
- 3.You pay ₦823,484 today. At maturity, you receive ₦1,000,000 — the full face value.
Discount Rate vs True Yield — Why They Differ
The most important concept for NTB investors to understand is that the advertised discount rate is not the same as your actual return. Because you invest less than the face value, your return on invested capital is higher than the stated rate.
The formula for true yield is: True Yield = Discount Rate ÷ (1 − Discount Rate × Days/365)
For a 364-day NTB at a 17.66% discount rate, the true yield is approximately 21.44% — nearly 380 basis points higher. This gap is larger for longer tenors, which is why our calculator prominently displays both figures for all three tenors simultaneously.
How to Use This NTB Calculator
- Enter the face value — this is the amount you will receive at maturity, not what you pay upfront.
- Select your tenor — 91, 182, or 364 days. The live CBN discount rate for each tenor is shown automatically.
- Optionally override the rate — if you have a specific rate from a broker or the secondary market, enter it to model that scenario.
- Review your results — see what you pay today, your interest received upfront, the face value at maturity, and crucially your true yield vs the stated discount rate.
- Study the bar chart — the chart compares discount rate vs true yield for all three tenors simultaneously, so you can identify which tenor gives you the best real return.
Benefits of Investing in Nigerian Treasury Bills
- —Very low credit risk: Backed by the full faith and credit of the Federal Government of Nigeria — default risk is considered negligible.
- —Tradable before maturity: NTBs trade on a deep secondary market (FMDQ), so you can sell before maturity if you need liquidity.
- —Interest received upfront: Unlike a fixed deposit where you wait for maturity, NTB discount income is credited at purchase.
- —High liquidity: NTBs trade on the FMDQ OTC Exchange and can be sold before maturity if needed.
- —Competitive yields: With 364-day NTBs yielding around 17.66% in 2026, they remain highly competitive versus inflation.
How to Buy Nigerian Treasury Bills in 2026
There are several ways to access NTBs in Nigeria:
- 1.CBN Primary Market Auction: Bid directly through your commercial bank or stockbroker. Minimum bid is ₦50,000,000 for primary market. Results are released every Wednesday.
- 2.FMDQ Secondary Market: Buy and sell existing NTBs through stockbrokers at market prices. This allows you to invest at any time and exit before maturity.
- 3.Digital Platforms: Apps like Cowrywise, Risevest, Bamboo, and Trove aggregate retail NTB access with much lower minimums. Returns may vary slightly from direct market rates.
- 4.Via Money Market Funds: Many MMFs invest heavily in NTBs, offering indirect exposure with daily liquidity and lower minimums.
Frequently Asked Questions
What are Nigerian Treasury Bills (NTBs)?
NTBs are short-term Federal Government debt securities issued by the CBN at a discount to face value, in tenors of 91, 182, and 364 days.
What is the difference between NTB discount rate and true yield?
The discount rate is used to calculate your upfront discount. Your true yield on invested capital is always higher: True Yield = Discount Rate ÷ (1 − Rate × Days/365).
How do I buy Nigerian Treasury Bills?
Via CBN primary auctions (min ₦50M), FMDQ secondary market through stockbrokers, or via retail investment platforms with lower minimums.
Is NTB income taxable in Nigeria?
Yes. Since 28 October 2025, NTB discount income attracts 10% withholding tax, deducted at source (FIRS public notice / Nigeria Tax Act 2025). FGN Savings Bonds remain exempt.
What is the minimum investment for NTBs?
₦50,000,000 for direct CBN auction participation. Through retail platforms and stockbrokers, access is available with much lower amounts — sometimes from ₦10,000.