How to Invest in Federal Government of Nigeria(FGN) Bond


FGN Savings Bond is an investment product for the federal government of Nigeria issued by the Debt Management Office (DMO).

This product targets the small savers or low-income households who will not be able to buy Treasury Bills (TB’s) due to the recent upward adjustment of the N10, 000.00 to N50,000,000.00 minimum investment deposit for TB.

You may describe a bond as debt securities issued to the public by a corporation, state, or federal government to raise capital for a particular project.

You lend money to the borrower at a fixed interest rate and receive that rate quarterly or in a lump sum, and at the bond’s maturity you get back the principal.

It typically has a coupon rate, dates of the coupon payment, and date of maturity.

As with Treasury Bills, it’s riskless to invest in this Bond.

The Government guarantees that accumulated interest will be paid quarterly or every three months.

On 13 March 2017, the DMO began selling this Bond on behalf of the Federal Government through the authorised Government Stockbroker for the Bond, Stanbic IBTC and certified Distribution Agents – Stockbrokers.

DMO has continued to make the Bond available for subscription to Nigerians every month after the initial offering. They normally sell this bond for a period of 5 days

This article will teach you how to invest in the FGN savings bond, the terms and characteristics of the Bond, the advantages of investing in the FGN savings bond, the measures to invest in the Bond, how to redeem the Bond.

Let’s continue on this guide from the features of the FGN Savings Bond.


Here are the terms and characteristics of the FGN savings bond

Amount: subscription of a minimum of N5,000 and a maximum of N50 million.

Interest Payment: DMO shall pay the fixed interest every three months or quarters.

Tenor: Period of 2- or 3 years.

Issuance frequency: Issuance is monthly by Subscription Offer.
Subscription Duration: The bid shall be made five days from the date on the DMO


Below are the advantages:

You would not be paying tax on the Savings Bond interest income You can use the FGN Savings Bond Certificate as collateral for loans.

You’ll have liquidity because you get interest per quarter or three-monthly interest payment.

There is no risk because the FGN promised returns on investment By using the interest to buy more instead of investing it you can save up for future ventures.

The FGN savings bond can be exchanged on the Nigerian stock exchange and sold whenever you want.

It supports savers with low incomes who can’t spend the latest minimum volume of Treasury Bills.

It helps ordinary savers to reap returns in the capital market from high-net worth investors.


Follow the steps for Investing in FGN Savings Bond

1. Determine the amount to be invested

You have to determine if this is a good investment for you. That this is one of Nigeria’s best investments.

2. Locate official bond agents

Discover and invest in the Official Bond Agents.

You can invest for the Bond, Stanbic IBTC and other Distribution Agents licensed by DMO – Stockbrokers – through the certified Government Stockbroker.

Check out the list of licensed stockbroking firms. You may also obtain the DMO web site list.

3. find out issue dates


DMO updates the Coupon rate on its website and some regional newspapers monthly on the first day of each month’s bid.

Find out the date of issue of the Primary Bid, opening and closing dates, Coupon cost, payment dates and other information on the DMO website.

This details can also be accessed from the offering circular on the Nigeria Stock Exchange website.

4. Open an account

If you do not have a Stockbroker, approach to opening a stockbroker account with any of the Exchange’s Dealing Member Firms.

5. Submit the necessary documents

Bring at least two photocopies of the following KYC documents (original to be seen) to the Stockbroking firm you have selected:

  • Passport
  • National identity card
  • Driver’s license
  • Utility bill
  • Voters card
  • Your job photo identification card issued by a recognized employer plus Federal Inland Revenue Service (FIRS) tax identification of the employer.

6. The stockbroker will make ready your account

To monitor your investment, your Stockbroker will open an in-house account for you and a CSCS account. The CSCS statement will represent the usual Bond certificate.

7. Download the Subscription form and fill the form

To obtain the subscription form, you can download via their website or from your stockbroker.

Once you have done that, you can then fill the form displaying the quantity you intend to buy.

8. Make the payment

This is the point where you pay in the amount your stockbroker has told you to invest. When the offer closes, your stockbroker will then transfer all the money it has collected to Stanbic IBTC.

This bank is the only government stockbroker to Federal government of Nigeria bonds.

After this process, you can then send your payment details to your stockbroker probably via a mail.

9. Wait for your settlement day

This is the day the offer closes and it is always the day you carried out the transaction plus three (3) working dsys.

After this, you can then ask your stockbroker for your CSCS statement. This statement should comprise the amount paid, quantity and the details of the bond,

How do you redeem the FGN savings bond?

You’d also want to know how to exit the investment after learning how to invest in the FGN savings bond, here is how to do it.

You will receive the guaranteed face value or principal directly to your account if you hold the investment in the Bond until the maturity.

If you don’t want to wait until the tenor of the Bond expires, you can redeem or sell the investment at The Nigerian Stock Exchange (Secondary Market) through your Stockbroker as they trade it there.

Collect and fill out a Mandate form from your Stockbroker to approve the Bond’s sale.

Your broker will be crediting your account at the prevailing market rate after sale. You could lose money if the country’s interest rates go up, then the bond’s face value would go down.

For example, if you buy on April 21, 2020, and sell on August 21, 2020, depending on the prevailing market price, you might get the principal you’ve invested.

As you do not want to wait until April 21, 2022 (the maturity of the Bond), you will only receive the interest you earned between April 21 and August 21, 2020.

Komolafe Timileyin is a passionate entrepreneur that loves to solve entrepreneurial issues. He is also a blogger and an upcoming Engineer.

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