Investors Purchase 2021 November FGN Savings Bond

November 3, 2021
FGN Savings Bond

By Sodeinde Temidayo David

Retail investors interested in purchasing the Federal Government of Nigeria (FGN) savings bond for the month of November 2021 can begin to do so.

This is because the Debt Management Office (DMO) has commenced the sale and this can be done through the approved organisations for this.

The FGN savings bond is sold every first week of the month and the minimum subscription is N5,000 with N50 million as the maximum amount of the debt instrument that can be bought at a time.

The exercise is supervised by the debt office, with proceeds used to finance various projects the federal government intends to execute in the financial year.

For this month, the DMO commenced the sale on Monday, November 1 and will wrap up on Friday, November 5, giving an opportunity for retail investors who missed the previous auction last month to participate.

This bond is auctioned to give a chance to low-income earners to secure earnings from the investment while supporting the government with its functions.

As usual, the bond is being auctioned in two maturities, a two-year note which will mature on November 10, 2023, and a three-year note with maturity on November 10, 2024.

For this month, DMO is offering the two-year note with the coupon rate of 7.38 per cent per annum and the three-year paper at a rate of 8.38 per cent per annum.

According to the debt office, the coupon will be paid quarterly, with the first interest payment expected on November 10, 2021, and the second on February 10 and so on till maturity, when the bullet payment would be paid.

To purchase the bonds, an investor would be required to pay N1,000 per unit subject to a minimum of five units subscription of N5,000 and the maximum of 50,000 units at N50 million.

The notes can be bought through stockbroking firms appointed as distribution agents by the debt management office.

The savings bonds are tax-free with competitive fixed interest rates to be paid every quarter and can be traded on the Nigerian Exchange (NGX) Limited to provide an exit route before maturity. They can also be used as collateral for loans as it is backed by the full faith and credit of the Federal Government of Nigeria and charged upon the general assets of Nigeria.

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