The federal government is asking for funds from low income earners in the country by auctioning the FGN savings bonds to them.
The papers were created by the government through the Debt Management Office (DMO) to ensure those earning very low can partake in the development of the nation.
In the past, low-income earners were allowed to purchase treasury bills from as low as N10,000, but the Central Bank of Nigeria (CBN), which normally sells the debt instrument, increased the lowest subscription amount to N50 million over three years ago.
It was after this development that the DMO created the FGN savings bonds to give room for Nigerians to invest in government debt securities for as low as N5,000.
In April 2020, the debt office suspended the sale of the notes due to restriction on movements in a few parts of the country in an effort to curb the spread of COVID-19.
However, because economic and business activities are gradually picking up after the lockdown was eased by the federal government, the DMO has resumed the FGN savings bond sales.
Subscription for the papers commenced on Monday and will end this Friday with the notes in two different tenors.
Business Post reports that the DMO is selling the 2-year FGN Savings Bond due August 12, 2022, at an interest rate of 3.61 per cent per annum.
Also, it will auction the 3-year FGN Savings Bond due August 12, 2023, at an interest rate of 4.61 per cent per annum.
For a better understanding of how the FGN savings bonds work, if an investor pays N100,000 for the 3-year maturity at 4.61 per cent per annum, he will get the sum of N1,152.50 every quarter (three months) for the next three years. At maturity, the initial amount paid for the bond, N100,000, will be credited into his account on August 12, 2023.
The DMO expects intending investors to pay N1,000 per unit for the notes subject to a minimum subscription of N5,000 and in multiples of N1,000 thereafter, subject to a maximum subscription of N50 million.
Investors can approach any authorised brokerage company to fill, submit the subscription form and make payment for the subscriptions with beneficiary name clearly indicated.
When the payment is confirmed by the stockbroker, the CSCS will credit the subscriber’s account with allocated FGNSB volume on the settlement date, which is Wednesday, August 19, 2020.
Source: BusinessPost
