Reported by Tahir Ishaq Shehu
The Debt Management Office (DMO) has opened the subscription window for the July 2025 issuance of the Federal Government of Nigeria (FGN) Savings Bonds, offering investors attractive but slightly reduced interest rates of up to 16.762% per annum.
According to a circular published on the DMO’s official website, the subscription period runs from Monday, July 7 to Friday, July 11, 2025.
Bond Offer Details
This month’s offering includes two bond tenors:
2-Year FGN Savings Bond: Matures on July 16, 2027, with an annual interest rate of 15.762%
3-Year FGN Savings Bond: Matures on July 16, 2028, with an annual interest rate of 16.762%
Each bond unit is priced at ₦1,000, with a minimum subscription of ₦5,000 and subsequent investments in multiples of ₦1,000. The maximum allowable subscription is ₦50 million per investor.
Interest payments will be made quarterly, on January 16, April 16, July 16, and October 16 each year. The first settlement date for this issuance is July 16, 2025.
Slight Decline in Yields
The interest rates for July represent a moderate decline from the previous month. In June 2025, the 3-year bond offered 17.121%, while the 2-year bond stood at 16.121%.
The decline is likely influenced by the Central Bank of Nigeria’s (CBN) decision to maintain the Monetary Policy Rate at 27.5%, as part of its broader efforts to curb inflation and stabilize the foreign exchange market. These monetary policy measures have also contributed to making Nigerian government securities increasingly attractive to foreign portfolio investors seeking higher yields.
June 2025 Bond Auction Recap
In the June 2025 auction, the Federal Government raised a total of ₦4.01 billion, slightly below the ₦4.28 billion recorded in May. Breakdown of the June allotments includes:
2-Year bond: ₦2.01 billion across 1,202 successful subscriptions
3-Year bond: ₦1.995 billion across 1,321 successful subscriptions
This continued demand reflects strong investor confidence in government-backed instruments despite slight fluctuations in yield.
Key Investment Highlights
The FGN Savings Bond programme, introduced in 2017, was designed to:
Deepen the domestic bond market
Promote financial inclusion
Provide retail investors access to safe, low-risk investment options
Additional benefits include:
Qualification under the Trustee Investment Act
Recognition as a government security under both the Company Income Tax Act (CITA) and Personal Income Tax Act (PITA)
Tax exemption for eligible institutional investors, such as pension funds
Listing on the Nigerian Exchange (NGX), enabling secondary market trading and enhanced liquidity
Eligibility as liquid assets for banks in liquidity ratio calculations
As inflationary pressures persist and traditional savings instruments offer limited returns, the FGN Savings Bond remains a compelling option for Nigerians seeking stable, government-guaranteed income streams.
