Investment in the FGN Savings Bonds rose by 53 per cent, year-on-year, YoY, to N7.5 trillion in the first half of the year (H1’22), from N4.9 trillion in the corresponding period of last year (H1’21).
Financial Vanguard analysis showed that the sharp increase in investors’ patronage for FSB in H1 ‘2022 is driven by the higher interest rate compared to interest rate on treasury bills (TBs).
The average interest rate on 2-year and 3-year FSB in H1’22 stood at 8.89 per cent and 9.89 per cent respectively, representing 2.82 percentage and 3.82 percentage points above the 6.07 per cent interest rate offered on the one-year TB last year.
Financial Vanguard analysis showed that investment in 2-year FSB rose by 57 per cent YoY to N2.576 trillion in H1’22 from N1.638 trillion in H1’21. Similarly, investment in the 3-year FSB rose by 51 per cent, YoY, to N4.882 trillion in H1’22 from N3.223 trillion in H1’21.
The FGN Savings Bonds, FSBs, was introduced by the Debt Management Office, DMO, on behalf of the Federal Government, as a retail savings product accessible to all income groups.
Furthermore, the FSB was introduced to deepen the national savings culture and diversify funding sources for the Government.
The FSBs are issued monthly in tenors of 2 and 3 years.
Minimum subscription is N5,000 with additions in multiples of N1,000, subject to a maximum of N50 Million. The FSBs are issued at an interest rate indicated in the offer announcement and interest is paid quarterly to investors.
According to the DMO, “the FSB is acceptable as collateral for loans by banks and can be sold for cash in the secondary market before maturity. Good for savings towards retirement, marriage, school fees, house projects, etc.”