Nigerian Treasury Bills (NTB) Calculator

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 zero credit risk.

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 22% for 364 days.
• 2.The discount amount = ₦1,000,000 × 22% × (364/365) = ₦219,342. This is your interest income, received upfront.
• 3.You pay ₦780,658 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 22% discount rate, the true yield is approximately 22.87% — nearly 87 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

1. Enter the face value — this is the amount you will receive at maturity, not what you pay upfront.
2. Select your tenor — 91, 182, or 364 days. The live CBN discount rate for each tenor is shown automatically.
3. Optionally override the rate — if you have a specific rate from a broker or the secondary market, enter it to model that scenario.
4. 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.
5. 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

• —Zero credit risk: NTBs are backed by the Federal Government — no default risk.
• —Tax-exempt income: NTB discount income is exempt from withholding tax and personal income tax in Nigeria.
• —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 over 22% in 2025, they remain highly competitive versus inflation.

How to Buy Nigerian Treasury Bills in 2025

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