By Modupe Gbadeyanka
The savings bond offer by the Federal Government for the month of November 2017 has commenced today.
The savings bond gives Nigerians the opportunity to invest in the bond market for as low as N5000 with interest as high as 13.091 percent per annum.
Specifically, the Debt Management Office (DMO), which sells the bonds on behalf of the government, is offering the 2-Year FGN Savings Bond due November 15, 2019 at 12.091 percent per annum, while the 3-Year FGN Savings Bond due November 15, 2020 is at 13.091 percent per annum.
Subscription for the bonds opens Monday, November 6, 2017 from 8am and will end by 12 noon of Friday, November 10, 2017.
The Savings Bond will have most of the features of the existing FGN Bond plus other features/benefits to the bondholder. It will be backed by the full faith of the Federal Government of Nigeria and is therefore deemed risk free.
The purpose of the savings bond is to deepen the national savings culture, provide opportunity to all citizens irrespective of income level to contribute to national development, enable all citizens participate in and benefit from the favourable returns available in the capital market, and also help to diversify funding sources for the government.
The Bond will be listed on the Nigeria Stock Exchange (NSE) for trading and provides liquidity for investors who want to exit before maturity.
Investors can subscribe through stockbroking firms trading on the floor of the NSE and accredited by the DMO to act as Distribution Agents.
Interest income is paid quarterly directly into bond holder’s account and the bond is acceptable as collateral for loans by banks and can be sold for cash in the secondary market before maturity.
Adedapo Adesanya