DMO cuts savings bond yield to 14.96% in August offer

The Debt Management Office (DMO) has opened subscriptions for its August 2026 Federal Government of Nigeria (FGN) Savings Bond, offering retail investors returns of up to 14.963 per cent per annum, lower than the 15.716 per cent offered in the previous month.

The debt office announced that the subscription window opened on August 3 and will close on August 7, with settlement scheduled for August 12, 2026.

Under the latest offer, the two-year FGN Savings Bond, maturing on August 12, 2028, carries an annual interest rate of 13.963 per cent, while the three-year bond, due on August 12, 2029, offers 14.963 per cent per annum.

According to the DMO, investors will receive interest payments quarterly on November 12, February 12, May 12 and August 12, while the principal will be repaid in full at maturity.

The August offer follows the DMO’s July bond auction, where it allotted N929.32 billion across three Federal Government bond issues after receiving subscriptions worth N1.74 trillion, underscoring sustained investor appetite for government securities amid elevated interest rates.

At the auction, the 22.60 per cent FGN January 2035 bond attracted subscriptions of N555.47 billion, with N245.73 billion allotted at a marginal rate of 18.34 per cent.

The 16.2499 per cent FGN April 2037 bond recorded the strongest demand, receiving N665.19 billion in subscriptions, while N381.46 billion was allotted at a marginal rate of 18.35 per cent.

Similarly, the 15.45 per cent FGN June 2038 bond attracted subscriptions of N518 billion, with N302.13 billion allotted, including a N50 billion non-competitive allotment, at a marginal rate of 18.40 per cent.

The FGN Savings Bond programme is designed to encourage retail participation in the domestic debt market by providing Nigerians with access to government securities through a relatively low entry threshold.

Each unit is priced at N1,000, with a minimum subscription of N5,000 and additional investments in multiples of N1,000, subject to a maximum investment of N50 million.

The DMO said the bonds are listed on the Nigerian Exchange Limited, qualify as liquid assets for banks’ liquidity ratio calculations and enjoy tax exemptions under the Company Income Tax Act and Personal Income Tax Act for eligible investors, including pension funds.

The bonds are backed by the full faith and credit of the Federal Government and are charged upon the general assets of the Federation.

Interested investors are expected to subscribe through stockbroking firms appointed by the DMO as authorised distribution agents.