Subscription for April 2021 FGN Savings Bond Ends Today

By Modupe Gbadeyanka

Nigerians interested in buying the savings bond of the federal government for the month of April 2021 have till today to do so.

Subscription for the paper opened on Tuesday, April 6 and according to a circular issued by the Debt Management Office (DMO), which is selling the debt instrument, the closing date is April 9.

Investors have the opportunity to subscribe to any of the two maturities offered for sale by the debt office; the 2-year FGN savings bond due April 14, 2023, and the 3-year FGN savings bond due April 14, 2024.

Business Post reports that the 2-year paper is being auctioned at an annual coupon rate of 5.52 per cent, while the 3-year note is going for an annual coupon rate of 6.52 per cent.

According to the DMO, the settlement date for the two bonds is April 14, 2021, while the dates for the payment of the interest to the bank accounts of subscribers are July 14, October 14, January 14 and April 14 till the bullet payment is made at maturity.

Buying FGN savings bond

To buy the bond, investors have to contact their stockbrokers and they would be required to pay N1,000 per unit subject to a minimum subscription of N5,000 and a maximum subscription of N50 million.

Interested subscribers can read full details of how to go about the purchase of the FGN savings bond HERE.

The papers are backed by the full faith and credit of the Federal Government of Nigeria and charged upon the general assets of Nigeria, meaning they are guaranteed payment of their investment.

The FGN savings bond qualifies as securities in which trustees can invest under the Trustee Investment. It also qualifies as government securities within the meaning of the Company Income Tax Act (CITA) and Personal Income Tax Act (PITA) for Tax Exemption for pension funds, amongst other investors. this means investors do not pay tax from proceeds in the trading of the notes.

After the sale, the bond is listed on the Nigerian Stock Exchange (NSE) to allow trading of the asset class at the secondary market.