FGN Savings Bonds Opens at Lower Rates on CBN Rate Cut

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The Debt Management Office (DMO) has opened for subscription, the October Federal Government of Nigeria (FGN) Savings Bond at a lower interest rate compared to the rate it offered in the previous month.

DMO announced this in a circular on Monday, October 6.

The offer opened today and will be closed on Friday, October 10 while the settlement date is scheduled for October 15, 2025.

The debt office offered the 2-year bond interest rate at 14.062 per cent per annum, lower than the 15.541 per cent rate it offered in September.

Similarly, it offered the 3-year bond at a 15.062 per cent rate, lower than the 16.541 per cent rate it offered in September.

Pinnacle Daily reports that the drop in the DMO’s October bond issuance reflects the decision of the Central Bank of Nigeria’s (CBN) benchmark interest rate cut.

CBN at its September Monetary Policy Committee (MPC) lowered the cut rate to 27 per cent to discontinue its hawkish and orthodox stance and to strategically rein in inflation.

Financial analysts say a rate cut could shift investors’ appetite away from fixed to equity securities.

However, the recent rate cut by many central banks, including the United States Federal Reserve and the stability in the foreign exchange market have made Nigerian bonds more attractive, particularly to foreign portfolio investors (FPIs) looking for higher yields.

In its circular on Monday, the DMO said the coupon (interest) payments for the October FGN Savings Bonds will be made quarterly on January 15, April 15, July 15, and October 15 each year throughout the duration of the bond.

The 2-year FGN Savings Bond will mature on October 15, 2027, while the 3-year bond will mature on October 15, 2028.

It stressed that interest on the bonds is payable quarterly, while the principal will be repaid in full at maturity (bullet repayment).

“The bonds are being issued on behalf of the Federal Government of Nigeria in accordance with the Debt Management Office (Establishment) Act, 2003 and the Local Loans (Registered Stock and Securities) Act, CAP L17, Laws of the Federation of Nigeria 2004.

“Each bond unit is priced at N1,000, with a minimum subscription of N5,000 and additional investments in multiples of N1,000, allowing investors to subscribe for up to N50 million,” DMO stated.

The FGN Savings Bond qualifies as an approved investment under the Trustee Investment Act and is also recognised as a government security under both the Company Income Tax Act (CITA) and the Personal Income Tax Act (PITA).

It said this makes it eligible for tax exemption by pension funds and other qualified institutional investors.

The bonds are listed on the Nigerian Exchange Limited (NGX), providing investors with the option to trade them on the secondary market and enhancing overall liquidity.

Pinnacle Daily reports that the FGN Savings Bond programme, introduced in 2017, was designed to deepen the domestic bond market, promote financial inclusion, and offer retail investors access to secure and low-risk government securities.

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