Close this search box.

Understanding Treasury Bills and Bonds: A Beginner’s Journey

Victor Odogwu
Published: July 2, 2024

Share this post ūüĎáūüŹĹ

Two stylized illustrations of cash or money - one depicting a curved green banknote or dollar bill, and the other a yellow coin or circular currency

Want to save money and plan for your future? Nigerian government Treasury Bills and Bonds might be a good choice. They’re safe ways to invest your money and can help it grow over time.

What are Treasury Bills and Bonds? How do they work? Let’s explain it simply.


What are Treasury Bills?

Treasury Bills, or T-Bills, are short-term loans to the Nigerian government. When you buy a T-Bill, you’re lending money to the government for a short time, usually between 91 and 364 days.


Here’s how it works:

1. You give your money to the government for a set time.

2. When that time is up, you get your money back plus extra (interest).

3. For example, if you invest ‚ā¶100,000 for 91 days at 5% interest, you’ll get ‚ā¶105,000 back after 91 days.


What are Treasury Bonds?

Treasury Bonds are similar, but they’re for longer periods, from 2 to 30 years. With Bonds:

1. You lend money to the government for a longer time.

2. You get regular interest payments while you wait.

3. At the end, you get your original money back too.


For instance, if you invest ‚ā¶250,000 in a 10-year Bond at 10% interest, you’ll get ‚ā¶25,000 every year for 10 years. After 10 years, you also get your ‚ā¶250,000 back.


Differences between Treasury Bills and Treasury Bonds  

  Treasury Bills  Treasury Bonds 
Tenor  Short-term (91 to 364 days)   Long-term (2 to 30 years)  
How to Get Returns  One payment at the end (principal + interest)   Regular interest payments + principal at the end  
Payment Frequency   Once, at maturity   Usually twice a year for interest, plus principal at maturity  





Interest Calculation  Discount from face value   Fixed percentage of face value  
Best used for  Short-term savings, lower risk tolerance   Long-term investment, desire for regular income  
Easy to Sell¬†¬† Very easy to sell quickly because they’re short-term¬† Can be sold if you need money, but it might take longer and be harder than T-Bills¬†
Minimum Investment   Often lower minimum investment   Usually higher minimum investment  
Interest Rate Risk  Lower due to shorter-term   Higher due to longer-term 



Why Choose T-Bills and Bonds?

1. They’re safe: The government promises to pay you back.

2. Regular income: It gives you money regularly.

3. Variety: It’s good to have different types of investments.

4. Easy to sell: If you need money quickly, you can usually sell these investments.




How to Start

You can buy T-Bills and Bonds from the Central Bank of Nigeria by visiting the nearest Sterling Bank branch, or simply do it online.


To start, you’ll need to:

1. Open a Sterling Bank account.

2. Show your ID and proof of address


Remember: Before investing, learn more about what you’re buying. Understand the risks and ask for help if you need it.

T-Bills and Bonds can be a great way to grow your money safely in Nigeria. They’re simple to understand and can help secure your financial future.


For more investment options, check out some offers from Sterling Bank.





Share this post ūüĎáūüŹĹ

0 0 votes
Article Rating
Notify of
Inline Feedbacks
View all comments

Suggested Reads

Subscribe to Newsletter

Be the first to know when we publish new content! Join the Newsletter today.

Would love your thoughts, please comment.x

*Showing only the top 5 results.

Position Username Points
yuyu.odukoyas FB
jo.bug IG
lisa.m X

We are still collecting gems. Please check back later. 

Interested in investing in Nigeria? Please fill the form below and we’ll reach out to you.


  • Provide your contact details for win notifications.
  • Click "Spin" to start the wheel. Cross your fingers for an "EDF Ticket" win, or try again if it lands elsewhere!
Spin the wheel!