DMO: FGN Savings Bonds October Offer Unveiled With 14.071% Rate

• The Debt Management Office has announced an October offer for two FGN savings bonds on behalf of the Federal Government.
• The bonds include a two-year option at 13.071% and a three-year option at 14.071% annual interest, both priced at N1,000 per unit.
• Subscription opened on October 5, closes on October 9, with settlement on October 14, and interest paid quarterly.
• These bonds are backed by the full faith and credit of the Federal Government and qualify for various legal and tax benefits.
• Designed for retail investors, they offer guaranteed returns and support national development.

These FGN bonds are fully backed by the Federal Government's full faith and credit, meaning the government guarantees their repayment.

The Debt Management Office (DMO), acting on behalf of the Federal Government, has unveiled its latest DMO FGN savings bonds October offer, presenting two distinct investment opportunities to the public. This announcement, made on Tuesday from Abuja, details the terms for these new Federal Government of Nigeria (FGN) savings bonds. Investors can subscribe to these bonds at a unit price of N1,000.

The first bond available is a two-year instrument, which is set to mature on October 14, 2028. This particular offering carries an annual interest rate of 13.071 percent. Following this, the second bond in the October offer is a three-year FGN bond, with its maturity scheduled for October 14, 2029. This longer-term option provides a slightly higher annual interest rate of 14.071 percent. The subscription window for these bonds opened on October 5 and will conclude on October 9, with the final settlement date slated for October 14.

These FGN savings bonds are structured to accommodate a broad range of investors, with a minimum subscription requirement of N5,000. Beyond this initial threshold, investments can be made in multiples of N1,000, up to a maximum subscription limit of N50 million.

A key feature of these bonds is the quarterly payment of interest, with specific coupon payment dates set for January 14, April 14, July 14, and October 14 each year. The principal amount of the investment will be repaid in a single bullet payment upon the bond's respective maturity date.

From a legal and financial perspective, these FGN bonds offer significant security and regulatory advantages. These FGN bonds are fully backed by the Federal Government's full faith and credit, meaning the government guarantees their repayment. Furthermore, these bonds are explicitly charged upon the general assets of Nigeria, reinforcing their robust financial foundation. The legal framework also positions them favorably: they qualify as securities in which trustees are permitted to invest under the provisions of the Trustee Investment Act.

Moreover, these instruments hold status as government securities under both the Company Income Tax Act and the Nigeria Tax Act, 2025, which allows for tax exemptions for certain investors, including pension funds. Their listing on the Nigerian Exchange Ltd. further enhances their accessibility and transparency. For financial institutions, these bonds are recognized as liquid assets, contributing to the calculation of their liquidity ratios, underscoring their utility within the broader financial system.

The DMO issues these FGN savings bonds as risk-free debt securities, specifically tailored to engage retail investors. This initiative allows individual citizens to participate directly in national development efforts by lending funds to the government.

In return, investors are assured of earning guaranteed returns on their capital. The overarching goal is to provide a secure and accessible investment avenue that supports government funding requirements while offering a reliable income stream to the public.

Source: Original reporting via News Agency of Nigeria.