By Modupe Gbadeyanka
The purchase of the FGN savings bond for November 2024 will close today, Friday, November 8, according to the details of the exercise, which started on Monday.
The retail bond sales are targeted at low-income earners to give them the opportunity to earn from the Nigerian capital market for as low as N5,000.
The savings bond is issued by the Nigerian government through the Debt Management Office (DMO), and was introduced after the Central Bank of Nigeria (CBN) increased the minimum subscription for treasury bills to N50 million from N10,000 less than a decade ago.
Since its introduction, many investors have embraced the asset class to earn regular income from the capital market.
The retail debt instrument is issued by the DMO in the first week of every month. The agency sells two tenors of two and three years.
For this month, the debt office is sell the 2-year savings bond due November 13, 2026 at a coupon rate of 17.44 per cent per annum, and the 3-year savings bond due November 13, 2027 at 18.44 per cent per annum.
To be part of it, intending investors will pay N1,000 per unit subject to a minimum subscription of N5,000 and in multiples of N1,000 thereafter, subject to a maximum subscription of N50 million.
The papers are backed by the full faith and credit of the Federal Government of Nigeria and charged upon the general assets of the country, with interest paid every quarter until maturity.
The savings bond qualifies as securities in which trustees can invest under the Trustee Investment Act, and also qualifies as government securities within the meaning of Company Income Tax Act (CITA) and Personal Income Tax Act (PITA) for tax exemption for pension funds, amongst other investors.
