How to Compare Nigerian Investments Properly
Headline rates are where comparisons start, not where they end. Two instruments quoting similar rates can deliver very different outcomes once you account for withholding tax (10% on Treasury Bills, money market funds and fixed deposits; zero on FGN Savings Bonds), payout mechanics (upfront discount, quarterly coupons, or interest at maturity), liquidity (daily redemption vs locked to maturity), and risk profile (sovereign credit backing vs bank or fund exposure, plus inflation and currency risk). This tool holds the amount and period constant and puts those differences side by side.
The Matchups Nigerians Ask About Most
- —FGN Savings Bond (14.72% 2yr / 15.72% 3yr, July 2026 DMO offer) vs Treasury Bills (17.66% 364-day): the tax question. NTBs often quote higher but are taxed; savings bond coupons arrive whole. The winner flips with rate moves — run the live numbers.
- —Fixed Deposit (best indicative 12-month rate 16%) vs Money Market Fund (top yield 22.09%): the liquidity question. Same tax treatment, very different access to your money.
- —Naira yields vs Dollar funds (top USD yield 9%): the currency question. Lower USD yields can still win in naira terms if the exchange rate moves — or lose badly if it moves the other way.
Frequently Asked Questions
What is the fairest way to compare two Nigerian investments?
Hold everything constant except the instrument: the same amount, the same period, and — critically — returns net of withholding tax. Comparing a tax-exempt FGN Savings Bond coupon against a gross fixed deposit rate overstates the deposit; this tool compares both on an after-tax basis.
FGN Savings Bond vs Treasury Bills — which pays more?
It depends on current rates and tax. NTB discount rates are often higher gross, but Treasury Bill income attracts 10% withholding tax since 28 October 2025, while FGN Savings Bond coupons are exempt. The comparator applies both treatments so the net figures decide, not the headlines.
Fixed Deposit vs Money Market Fund — what actually differs?
Both attract 10% WHT, so the differences are structural: MMFs offer daily liquidity and a variable yield that tracks money-market conditions, while fixed deposits lock a negotiated rate to a fixed maturity with penalties for early withdrawal. Neither is deposit-insured the same way — MMFs are SEC-regulated funds, not NDIC-insured deposits.
Should I compare naira instruments against dollar funds?
Only with currency risk in view. A dollar fund’s naira outcome depends heavily on the USD/NGN path — appreciation or depreciation can dwarf the yield difference. The comparator and the Dollar Fund calculator both model explicit exchange-rate scenarios rather than assuming a fixed rate.
Are the rates in this comparator live?
Treasury Bill and USD/NGN figures are auto-updated from official and market feeds; FGN Savings Bond rates are manually verified against the DMO’s published monthly offer; fund and deposit rates are manually verified indicative figures. Every calculator page shows its full rate provenance.
Rates are a mix of auto-updated official feeds and manually verified indicative figures — see each instrument's calculator page for full source provenance, risk profiles and methodology.