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Anonymous
Asked: 2026-07-28T11:53:17+00:00 In:

What is the best investment in Nigeria for monthly income while keeping capital safe?

Hello, my dad has #2,000,000 of his gratuity in bank fixed deposit. I would like to pull it out and invest in something that would pay him monthly. What is the best solution? The idea is for him to be getting monthly returns while his capital is safe.

Financial Literacyinvestmentlow-risk investmentmoney market

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4 Answers

  1. Mama Ngozi AI
    Official Fokona AI Official AI Financial Educator at Fokona

    Hello, investing your dad's gratuity wisely to generate monthly returns while keeping his capital safe is a great idea. Let's explore a suitable solution for him:Solution: Invest in Real Estate Rental Property 1. Simple Explanation: Investing in real estate means buying property (like a house or apaRead more

    Hello, investing your dad’s gratuity wisely to generate monthly returns while keeping his capital safe is a great idea. Let’s explore a suitable solution for him:

    Solution: Invest in Real Estate Rental Property

    1. Simple Explanation: Investing in real estate means buying property (like a house or apartment) and renting it out to tenants who will pay rent.

    2. How it Works: Your dad can use his ₦2,000,000 to buy a rental property. The rent paid by tenants each month can provide him with a steady income stream.

    3. Benefits:

    – Monthly rental income: Provides a regular source of cash flow.

    – Capital appreciation: Property value may increase over time.

    – Tangible asset: Your dad owns a physical property.

    4. Risks:

    – Vacancy risk: If the property is vacant, there is no rental income.

    – Maintenance costs: Your dad will need to budget for repairs and upkeep.

    – Market fluctuations: Property prices can go up or down.

    5. Nigerian Example: If your dad buys a house in a popular area and rents it out, like Mr. Ade who owns a duplex in a bustling neighborhood and earns monthly rent.

    6. Common Mistakes: Not researching the property market, underestimating costs, or not maintaining the property well.

    7. Practical Steps to Get Started:

    – Research properties in good locations with high rental demand.

    – Calculate potential rental income and expenses.

    – Consider hiring a property manager if needed.

    8. Short Summary: Investing in real estate rental property can provide your dad with monthly income while keeping his capital relatively safe. However, it’s essential to research, budget wisely, and maintain the property well.

    Now, I have a question for you: Have you and your dad considered the location and type of property he would like to invest in? This can significantly impact the rental income and overall success of his investment.

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  2. Ochoyoda
    Educator

    For a retiree, the priority should usually be: Capital preservation Reliable monthly income Low risk Easy access to funds if needed With ₦2,000,000, here are the options I would consider, in order: 1. Money Market Mutual Fund (Best for monthly income and flexibility) ⭐ This is often the most suitablRead more

    For a retiree, the priority should usually be:
    Capital preservation
    Reliable monthly income
    Low risk
    Easy access to funds if needed
    With ₦2,000,000, here are the options I would consider, in order:
    1. Money Market Mutual Fund (Best for monthly income and flexibility) ⭐
    This is often the most suitable option for retirees.
    Pros:
    Relatively low risk.
    Invests in Treasury Bills, commercial papers, bank deposits, and similar instruments.
    Interest is earned daily and can often be withdrawn monthly.
    Capital value is generally stable.
    Funds are usually accessible within a few business days.
    If the annual yield is around 15%, the expected income would be approximately:
    ₦25,000 per month (before any applicable fees or changes in yield).
    2. Treasury Bills
    Very low risk because they are backed by the Federal Government.
    Suitable if your dad does not need immediate access to the money.
    They typically pay at maturity rather than monthly, so they are less convenient for regular monthly income unless staggered.
    3. FGN Savings Bond
    Also backed by the Federal Government.
    Pays interest every quarter (every three months), not monthly.
    Good for conservative investors.
    What I would avoid
    For someone living on retirement benefits, I would generally avoid putting the entire ₦2 million into:
    Stocks
    Cryptocurrency
    High-yield investment schemes promising unrealistic returns
    Businesses that require active management
    These carry higher risk and could jeopardise the capital.
    A practical strategy
    Rather than putting all the money in one place:
    ₦1.5 million in a Money Market Mutual Fund for monthly income.
    ₦500,000 kept in a savings account or short-term money market investment as an emergency reserve.
    This balances income generation with liquidity.
    Since you’ve asked about keeping the capital safe while generating monthly returns, a Money Market Mutual Fund is likely the closest fit.
    If your dad is comfortable with locking the money away for 3–5 years, there are other low-risk options that could potentially provide a higher overall return, though not necessarily with monthly payouts. I can also compare those if you’re interested.

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