An opening has again opened for low-income earners interested in buying the savings bond of the federal government of Nigeria.
The exercise would be conducted by the Debt Management Office (DMO) and for the December sale, the notes would be offered in the usual two tenors.
According to the circular issued by the debt office, the two-year maturity would be auctioned at a coupon rate of 1.32 per cent, while the three-year instrument would go for 1.82 per cent.
Investors interested in the debt securities would be required to buy a minimum of N5,000 and a maximum of N50 million, with additional subscription in multiples of N1,000.
The interest on the value of the bonds subscribed by investors is paid four times yearly on March 16, June 16, September 16 and December 16. The investment is tax-free.
To buy these bonds, an intending investor would be required to contact an accredited stockbroker to fill the subscription form and then make payment.
The subscription for the December FGN savings bond must be made between Monday, December 7, 2020, and Friday, December 11, 2020.
The FGN savings bond offers better returns than interest rates currently being paid by banks on savings accounts and it a steady source of income because of the quarterly payment of interest to subscribers.
Another good thing about it is that it is very cheap to purchase because with N5,000, an investor is good to go, giving room for a subscriber to save idle funds.
Also, the debt instrument is backed by the full faith and credit of the Nigerian government and charged upon the general assets of Nigeria. This means investors are guaranteed of their capital at maturity.