DMO issues 2, 3-year Savings Bonds

by Iheanyi Nwachukwu

February 8, 2018 | 12:45 am
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The Federal Government of Nigeria (FGN) Savings Bond offer for this month of February opened since Monday February 5, 2018. The Savings Bond offer which opens for a period of just five days closes tomorrow Friday, 9th February 2018.

FGN Savings Bond is an investment vehicle offered by the Sovereign that serves to meet the investment needs of low-high income citizens in the economy by enhancing their savings culture while also acting as an efficient debt management tool for the Nigerian Treasury.

With a minimum subscription of N5,000 and maximum subscription of N50million, the 2-Year FGN Savings Bond due February 14, 2020 is currently being offered at a coupon rate of 10.277percent; while the 3-Year FGN Savings Bond due February 14, 2021 is also being offered at a coupon rate of 11.277percent.

The coupon rate is the rate of interest paid by the bond issuer (Debt Management Office on behalf of Federal Government of Nigeria) on the bond’s face value.

The FGN Savings Bond benefits individual savers, small businesses, co-operatives, foundations, nonprofit organizations and other investors. Nigerian citizens resident abroad and foreigners resident in Nigeria are also eligible. FGN Savings Bond is a scrip-less security as allotment is done electronically into investor’s Central Securities Clearing Systems (CSCS) account and investors will receive notifications.

Benefits of investing in FGN Savings Bonds include: interest income paid quarterly and directly into bond holder’s account; the Bond is acceptable as collateral for loans by banks and can be sold for cash in the secondary market before maturity. It is also good for savings towards retirement, marriage, school fees, house projects, and so on. The investment is safe because it is backed by the full faith and credit of the Federal Government of Nigeria.

The purpose of FGN Savings Bond which is offered first week of every month is to deepen the national savings culture; provide opportunity to all citizens, irrespective of income level, to contribute to National Development.

It also enables all citizens participate in and benefit from the favourable returns available in the Nigerian Capital Market; while also helping to diversify funding sources for the Government.

Iheanyi Nwachukwu

by Iheanyi Nwachukwu

February 8, 2018 | 12:45 am
  |     |     |   Start Conversation

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