FG opens sale of savings bonds with lower returns for retail investors

The Federal Government of Nigeria (FGN), through the Debt Management Office (DMO), has opened the sale of its Savings Bond to retail investors, offering lower returns compared to the past four months.

The offer, which commenced on Monday, July 1, is set to close on July 5, with the settlement date slated for July 10, 2024.

The government is offering a two-year savings bond at an annual return of 16.67%, down from the 17.41% offered in June 2024.

Similarly, the three-year bond is being sold at 17.67%, a decrease from the 18.41% offered last month. These returns are the lowest on FGN savings bonds since March 2024.

Interest payments on these bonds will be made quarterly, with coupon payment dates set for October 10, January 10, April 10, and July 10.

The two-year Savings Bond will mature on July 10, 2026, while the three-year Savings Bond will mature on July 10, 2027.

In March 2024, the government sold a two-year savings bond at 17.04% per annum, which is 2.17% higher than the current offer. The three-year bond in March 2024 was sold at 18.04%, which is 2% higher than this month’s offer.

According to the DMO, the minimum amount that can be invested in the Savings Bond is N5,000, while the maximum is N50 million.

Interested investors are advised to contact appointed stock-broking firms as provided by the DMO.

These bonds provide an opportunity for retail investors to earn a stable return while contributing to national development. However, the lower returns may reflect changing market conditions and the government’s borrowing strategy.