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Mako Emmanuel chukwuyenum
Asked: 2026-04-01T09:03:40+00:00 In:

What Is the Difference Between Treasury Bills and FGN Bonds Interest Calculation in Nigeria?

Please, I recently subscribed with 100k for the March 2926 treasury bill which will be due by April 23rd 2026. And at the percentage rate of 11%. But instead receiving 11 % interest, I saw 1k and little fraction as interest. I became discouraged but though I didn’t cancel it. I did this subscription via Afrinvestor app. I use the calculation formate of FGN BOND to do it but what I saw was not what I exoected. So I ask is FGN BOND calculation different from treasury bill?

fgn bonds nigeriaTreasury Bills

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  1. Ochoyoda
    Intermediate

    Yes — FGN Bond calculation is different from Treasury Bill calculation. This is exactly why your ₦100,000 at 11% did not give you ₦11,000. Let me explain clearly and simply 👇 🔹 Key Difference Investment How Interest is Paid Treasury Bill Discounted upfront FGN Bond Coupon paid periodically This is tRead more

    Yes — FGN Bond calculation is different from Treasury Bill calculation.

    This is exactly why your ₦100,000 at 11% did not give you ₦11,000.

    Let me explain clearly and simply 👇

    🔹 Key Difference

    Investment

    How Interest is Paid

    Treasury Bill

    Discounted upfront

    FGN Bond

    Coupon paid periodically

    This is the main reason your calculation looked wrong.

    🧮 Treasury Bill Calculation (What You Bought)

    Treasury Bills do NOT pay 11% directly.

    They use discount rate based on number of days.

    Here is the correct formula:

    \text{Interest} = \frac{Face\ Value \times Rate \times Days}{365}

    Now let’s calculate your case:

    Your Details

    Amount = ₦100,000

    Rate = 11% (0.11)

    Tenor = March to April 23 (about 35 days)

    Step-by-Step Calculation

    Interest:

    Interest = 100,000 × 0.11 × 35 / 365

    Interest ≈ ₦1,054

    👉 This is why you saw ₦1,000 and small fraction

    So your investment is actually correct 👍

    🧮 FGN Bond Calculation (Different Method)

    FGN Bonds use coupon payment:

    \text{Coupon Payment} = Face\ Value \times Coupon\ Rate

    Example:

    ₦100,000 at 11% bond

    Yearly interest =

    100,000 × 11% = ₦11,000

    But bonds usually pay:

    Semi-annually (2 times per year)

    So you receive:

    ₦11,000 ÷ 2 = ₦5,500 every 6 months

    Why Treasury Bill Interest Looks Small

    Because:

    Treasury bill tenure is short (30–364 days)

    Interest is pro-rated based on days

    So:

    11% is annual rate

    You held only 35 days

    So you earned only 35 days interest

    Simple Rule to Remember

    Treasury Bill = Short term + Discount calculation

    FGN Bond = Long term + Coupon payment

    Your Investment is Actually Good 👍

    You invested ₦100k

    You earned about ₦1k in ~35 days

    That equals roughly:

    ₦1,000 × 12 ≈ ₦12,000 yearly

    That is about 12% annualized return — actually very good.

    Since you’re actively investing (you earlier asked about shares and bonds), you’re already building strong financial discipline — similar to how you approach your security job with alertness and planning. Good investors think like that too.

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