Category: Personal Finance

How to Invest in FGN Bonds in Nigeria – Everything You Should Know About FGN Savings Interest Rates & Current Yields Including How it Works and Get Started

If you have been receiving emails from your stockbrokers on latest FGN savings bond but don’t understand bond as a fixed income investment, here is a simple explanation and detailed guide on how it works, including steps to invest in FGN bond.

FGN Bond is a bond issued by the Nigerian government in exchange for cash at a given interest rate and a repayment period. It also states how payments of the principal and interest will be made. A bond is a confirmation from a borrower that it borrowed money from a lender at a given interest rate and repayable over a period. They also include a minimum amount that can be subscribed to by the lender and in what multiples.

The FGN bond is a major source of finance for capital projects; otherwise known as longterm infrastructural investments. This is the reason bond tenors span for up to 20 – 30 years.

Why you should invest in FGN savings bond

When you invest in the FGN bond, you earn a passive interest income that will be paid quarterly directly into your savings or current bank account. Interestingly, you really do not need to have millions in your bank account to invest as anyone with as little as N5,000 can invest in the bond.

Continue reading Here is Everything You Should Know About FGN Savings Bond

How Do I Invest in Treasury Bills in Nigeria – Treasury Bill Rates Today in Zenith, GTBank, FirstBank, Access, Stanbic IBTC, Ecobank, Sterlings, Fidelity, Union Bank & FCMB 2019

This guide is for investors that are looking for alternative investment opportunities in the fixed income market. In my previous investing tips on where you should invest your money, I mentioned TB among other places you can grow your money.

Let’s Discuss Treasury Bills

Treasury Bills are government debt instruments issued by Central Bank of Nigeria on behalf of the former to finance expenditure. The instrument is sold through a bi-weekly auction conducted by the Central bank in Primary Market Auction. Buyers are requested to quote bids following which the average minimum bid is selected.

Steps to Buy Treasury Bills in Primary Market:

To buy Treasury Bills you will have to approach your bank requesting for a form. You fill the form with your personal information also indicating the amount you want to buy as well as your bid rate. However, with the advent of a bank’s treasury bills mobile application, buyers are only required to fill a signup form once.

Nowadays, the easiest way is through Sterlings Bank’s Treasury bill mobile app. The app is accessible to all irrespective of their bank. Gone are the days when the idea of investing in treasury bills meant owning millions in order to invest.

Continue reading How Do I Invest in Treasury Bills in Nigeria?

Best Mutual Funds in Nigeria – Top Performing Managers to Invest In Nigeria – Choose Equity-Based Fund, Money Market Funds or Fixed Income Funds for your Money in 2018, 2019, and 2020

I had earlier shared a guide on how a novice can start investing in the Nigeria stock market without getting involved in the day to day business and the best way to get started is via a regulated and registered mutual fund manager.

Mutual fund managers are considered professionals who understand and have been trained in stock market investing.

I also mentioned some of the mutual funds to consider based on their past performance in 2017.  Please note that these mutual funds are equity-based managers who invest in stocks and as such come with a higher risk of exposure to the stock market volatility. Just like we saw these funds deliver up to 52% in  2017 as investors drove the market to a peak level, the risk of sell-offs had also dragged their net asset value to the south.

The overall NSE index is down by 16% with all the 10 equity-based mutual funds following the same path.

According to Financial Vanguard, FBN Nigeria Smart Beta Equity Fund, managed by FBN Capital Asset Management, a subsidiary of First Bank of Nigeria, Stanbic IBTC Aggressive Fund (Sub-Fund), managed by Stanbic IBTC Asset Management and United Capital Equity Fund, managed by United Capital Asset Management, led the negative trend with a decline of 44.5 percent, 36.4 percent and 23.5 percent respectively in their NAV.

Axa Mansard Equity Fund, managed by Axa Mansard Investments placed fourth, dropping by 22 per cent, while Stanbic IBTC Nigeria Equity Fund, also managed by Stanbic IBTC Asset Management and ARM Aggressive Growth Fund managed by Asset & Resource Mgt Company followed with 15.4 per cent and 12.1 per cent decline respectively.

Others are Frontier Fund managed by SCM Capital, Legacy Equity Fund managed by First City Asset Management and Paramount Equity Fund, managed by Chapel Hill Denham Mgt, which slipped by 4.9 per cent, 3.7 per cent and 2.3 per cent respectively.

Considering the huge risk involved in investing in equity-based mutual funds, it makes more sense for long-term investors to buy into mutual funds that had recorded consistent return in the midst of market volatility on at least 5-year horizon.

Although past performance isn’t a guarantee for future performance but to a larger extent, it helps to screen for managers that had survived various economic cycles and are considered top professionals in the investment space.

These are mutual fund managers for those that aren’t comfortable with equity risk but still want a slow and steady return above benchmark.

Stanbic IBTC Absolute Fund

This is the most consistent of all the mutual fund managers mentioned here, The fund invests in fixed income securities like Treasury Bills, Bonds, Commercial Papers, etc with an objective of providing liquidity.

Stanbic IBTC Absolute Fund has made a loss in 1 month out of 69 months ranging from January 2013 to October 2018. The average return of this fund since 2013 is 78.12% and on a breakdown, the managers generated 10.01%, 12.61% in 2014, 13.19% in 2015, 11.59% in 2016 and 18.48% in 2017. So far in 2018, the fund has gathered a YTD return of 12.33%. This means that the fund has generated a total of 78.12% return since 2013.

FSDH Coral Income Fund

The fund invests a maximum of 30% of its investible fund in the equities market while the balance is exposed to fixed income market and money market instruments. The objective of FSDH Coral Income Fund is to provide long-term capital appreciations while maintaining low to medium volatility.

The fund has lost 11 times out of 118 months and had generated 102.41% on average.

Zenith Income Fund

As the name implies, this fund is owned by Zenith Bank and had been delivering positive return since 2012. Although, the percentage return has been a single digit, inventors, looking for a balanced fund, are still well-off investing in Zenith Income Fund. The fund invests in Treasury Bills, and Bonds.

The fund has only made loss 15 times out of 82 months period.

That is all for now! If you look closely at the type of assets these funds are most exposed to, you will notice that the money and fixed income market makes more sense to low risk long-term investors.

Where to Invest Money in Nigeria – Top Online Savings and Investment Opportunities With Highest Interest Rates on Fixed Deposits Account than Stock Market.

It’s Sunday afternoon and I decided to check the average return on Nigeria stock market in the last 6 months so I could focus and buy more shares in companies that delivered more than 50% this year. In my portfolio, I had few stocks on the green territory and a larger number of equities traded on the negative territory because of the overall market sentiments. The NSE index is down, back to the red region, no thanks to the anticipated US rate hike that led to sell-offs in emerging market currencies and equities. This coupled with rising tension and political risk had adversely affected foreign portfolio inflows to the equities market.

What is going to happen in the next half of the year (2018), you may ask? I must be candid, the next 6 months isn’t going to be smooth for stocks.  The upcoming election is one factor you can’t ignore right now, the heat is becoming hotter and investors, from past experiences, tends to sell their equities ahead of general election, so expect NSE index to be broadly affected by this sentiments.

Another factor is the second anticipated US fed rate hike, carry trade traders tend to favour currencies with a rising interest rate to a stable currency which is the reason emerging market currencies are at risk of sell-offs. The US bond yield is at an all-time high right now and such return is no doubt “a sugar on fixed income investors’ tongue“. The NSE index might also be impacted as a major percentage of capital flows to the NSE comes from foreign portfolio holders.

Another key factor is a general sentiment, we think investors aren’t seeing any positive market or fundamental news that will drive the market again, Oil price which is suppose to be a key driver is up in the last 6 months but have had little or no impact on the NSE market. The correlation, this year, is now negative; as Oil prices reach a new high, investors aren’t factoring such positive indicator into the NSE all share market as witnessed in 2017. I feel such news has already been priced in.

What happens to my portfolio? Well, that depends on the sector you had invested in. While the next 6 months might not be as smooth as you would expect, there are still stocks to buy and enjoy average return above the NSE index.

I have already shared a detailed guide on how to pick stocks in a bearish market, a simple strategy that uncovered my best performers right now. Click here to learn more, maybe it will help you reshuffle your portfolio to select stocks that would do well this year.

For some of us who are still protective in this volatile market and wouldn’t want the bearish trend to wipe out a significant portion of our investment portfolio, I will be sharing the 3 alternative low-risk fixed deposit options that had outperformed the Nigerian stock market index so far. These investment options do not necessarily demand a special skill, financial prowess or consultation with a stockbroker, we are currently exploring them to, not only protect our investment but at least hedge against equity market fall.

As a smart investor, the stock market shouldn’t be the only place to make money, fixed deposit and insurance options are where to invest money in Nigeria

PiggyBank SafeLock

PiggyBank is an automated savings app that lets you save a specified amount (with a “Quick Save” feature for saving at your pace), for a stated number of days after which the fund will be available for withdrawal and if you opt to cash out before expiration, a 5% charge will be deducted from the amount saved.

But here is the catch about PiggyBank that made me recommend the app as one of the best places to save and earn higher interest above the Nigerian stock market; PiggyBank offers a SafeLock feature, an innovative disciplined fixed deposit opportunity that lets you lock away cash for a specified period while your interest is paid upfront.

For instance, if you wish to fix N1,000,000 for a year, you will earn 12.4% upfront, which is N124,000 payable into your PiggyFlex account. PiggyFlex account holds all the interest earned on your fixed deposit, and it’s available for withdrawal.

You can give PiggyBank a try as the six (6) months interest rate estimated at 6% far exceeds the NSE index performance in the same period. In the midst of stock market volatility, you can explore this guaranteed interest income opportunity ahead of the general election fever.

Like I always say, I don’t practise what I don’t preach, Click here to read my success story on PiggyBank Website.

I have already reviewed the other two savings plan you can explore if the stock market seems risky to you.

To learn more about the other two fixed deposit investment plan, click here.

Please note that the NSE market return we benchmarked these fixed income opportunities on, is the first half of 2018.

Best Bank for a Domiciliary Account in Nigeria – Compare Account Opening Requirements, Fees & Charges, Interest, Exchange Rate and Security for FCMB, First Bank, GTBank, Access, Zenith, Ecobank, UBA, Wema, Sterling, Diamond, Stanbic IBTC, Fidelity

This article will help you spot the best bank for a domiciliary account in Nigeria with 6 useful guides to compare the banks you want to open an account with.

Owning a domiciliary account with a Nigerian bank is not an option again, it’s a necessity for someone that wants to manage and protect his wealth by diversifying into foreign currency portfolio. A lot of Nigerians still don’t know that a domiciliary account is an alternative investment option to consider, now that the USD exchange rate is on a bullish side.

You will find tips on how to open an account with all the Nigerian banks alongside basic requirements you need to have before your account officer can proceed with the domiciliary account opening procedures. I also went ahead to give reasons you should own a domiciliary account; cost savings when paying online, exchange rate gain and access to offshore investment opportunities.

See – How to trade open a US Stock trading account using your Domiciliary account.

Best Bank for a Domiciliary Account in Nigeria – 6 Key Tips

For a new starter looking for the best bank for a domiciliary account in Nigeria, here are basic tips on how to compare FCMB, First Bank, GTBank, Access, Ecobank, Unity, UBA, Wema, Sterling, Diamond, Stanbic IBTC, Fidelity, Zenith Bank, Union and Heritage Bank.

1. Check Monthly Fees

When you go to the bank to withdraw from your domiciliary account at the counter, you will be charged for withdrawer (depending on the amount and whether you used a counter cheque or your own chequebook). Ask your account officer the bank charges on withdrawing, ATM maintenance fees, cheque slip charges and other sub-charges in order not be taken unawares. Two days before I wrote this article, my bank deducted $10 from my account as an annual account maintenance fee and I was wondering how they are maintaining account until I approached my account officer.

2. Minimum Requirements

Before opening a domiciliary account with a bank, compare what the requirements are across selected banks, while some will ask you to deposit a minimum of $100, utility bills, passports, two referees with current accounts, others may be higher.

3. Transaction Limits

Inasmuch as a domiciliary account allows you to make purchases and pay a merchant directly, CBN is still beaming its searchlight on foreign currency transactions, money laundry and so on, and as such, there could be some restrictions on your domiciliary account transactions. A few years ago, CBN mandated all domiciliary account withdrawal to be paid in Naira using official exchange rate and other time, they restricted foreign account transfers to $10,000. These are some of the ways your use of dom account could be limited but you still need to compare how individual banks transactions limit are so you can settle for the institution with flexible policy.

4. ATM Charges

Have you used the debit or credit card on your domiciliary account to withdraw from an ATM machine? I tried it during an emergency and was amazed at the exchange rate my bank applied, it was over N100 lower than what I would have sold the currency per dollar at the black market. You need to compare inter-bank exchange rate on AbokiFX and what your bank currently offers.

5. Mobile and Internet Banking;

You may not be free to walk into a bank to carry out transactions on your domiciliary account every time but with mobile banking app on your smartphone, you can easily check balance, transfer fund, view on incoming flows real time and monitor your account history. Compare features available and how fast mobile applications for your banking services will be across some selected banks so you don’t experience network issues; though, it could occur but shouldn’t be frequently as this could be frustrating.

6. Security

This is the most crucial of all these tips mentioned here. Find a bank that sends security alert and tips to its customers on a weekly or monthly basis, this will help you know the method scammers are using to access users account online. That doesn’t mean you should relent and leave the security of your account to your bank, update yourself and subscribe to some internet banking security blog for useful guides.

Scammers are constantly adopting new strategies, most of which are mobile related, to steal sensitive information like credit cards, from forex account owners and you can’t afford to be relaxed, take actions, buy genuine anti-virus like Kaspersky internet protections.

While these are my 6 basic tips to find the best bank for a domiciliary account in Nigeria, feel free to share comments and suggestions.

How To Invest In Nigerian Banks – Learn The 4 Best Investment Opportunities In Banking Sector -Fixed Deposits, Commercial Papers, Mutual Funds and Stock Trading 

A lot of people thought that banks are financial institutions designed to only accept a deposit/mobilise funds for savings purpose and make it available to their customers upon request, they don’t that know beyond the normal savings and withdrawal services, there are investment opportunities offering better return compared to the paltry 2-3% interest income.

See – 4 Top Investment Apps You Should Download for Higher Returns Than your Bank

In this dynamic environment, where the price of essential amenities is constantly surging higher every day, you can’t afford to be mediocre or allow the value of your savings gets wiped out by inflation which, as of this writing, sits at 13-14%. Rather than allow your bank take your money, pay your 2-3% interest and advance your cash to corporate customers at a higher interest of up to 22%, there are alternative investment options you can try now.

This article explores practical ways you can invest in Nigerian banks at moderate risk and earn returns on your investment.

See – How to create multiple streams of passive income for yourself even if your salary isn’t enough.

How to invest in Nigerian banks – 4 Opportunities to Explore:

• Fixed deposits 
• Commercial papers
• Mutual Funds
• Stocks

Investment in Fixed Deposit

Commercial Paper

Mutual Funds

Stock

Best Investment Opportunities In Nigeria – Where To Invest Your Money With High Return, Low Risk – List Of Untapped Fixed Income Financial Opportunities This Year.

When I drew the business model and jotted-down content ideas of this blog, I never considered alternative fixed income investment opportunities as a category to be added too soon, but as a flexible investment entrepreneur who listens to the subscribers’ request, I felt it isn’t a bad idea to talk about the investment options you can explore (amidst rising cost of living) beyond the stock market but with key focus on risk tolerance and capital protection. Besides, it is not everyone that can swallow the risk that comes with stock investing.

My focus on risk here means that I would be screening investment options strictly on legal, risk level and return potential; I can’t undertake a long or short term investment that wouldn’t let me sleep well at night, if it’s going to make me get worried, then I won’t give it a try, that’s my mantra.

I had some idle cash that generated from financial services rendered to a corporate client and decided to scout for the best alternative investment opportunities in Nigeria offering high-return above and twice the inflation rate of 11 – 13% in 360 days with the lowest risk of capital loss. This time, I wasn’t going save the cash and allow my bank use it for business nor go for the fixed deposit investment return option of 8 – 9% p.a offered by our local banks, I wanted something better than bank and money market rates. Besides, my benchmark rate was set at 15% per annum (the average inflation rate figure as of this writing) which makes it even more difficult to find a financial investment opportunity offering such a higher return at low risk.

From 2014-2017, 1-year treasury bills offered up to 22% but as economic risk reduces on the back of a bullish oil market and stable exchange rate, it went down to 15%. So, if you had been a firm believer of TBs as the best-fixed income investment, you probably should re-think your portfolio allocation.

The only investment that could possibly beat the inflation rate of 11-13% is the one invested in professionally managed equity mutual fund with a track record of impressive positive performance. Some of these funds posted up to 52% return on investment in 2017; if you had invested N1m, you would have ended the year with a portfolio value of N1.52m.

You know what? I still wouldn’t give it a try because the stock market isn’t devoid of risk, this is not cash I would love to expose to share price fluctuation in short-term. After all, a lot of equity mutual funds also posted a negative return.

Mutual funds, like I said, are good long-term investment options; managers of these funds basically pick stocks that will deliver long-term gain from share price appreciation and dividend income growth.

On a lookout for other lower risk short term opportunities, I discovered the three emerging high yield and secured investment providers no one is actually talking about, while these investments are still new in Nigeria, some smart businesses entrepreneurs like us are already cashout from the model. It is a lending business opportunity.

You are aware of loan lending platforms in Nigeria like Pay later, C24, Kia-Kia, etc. These guys are taking advantage of the personal finance loan business gap banks couldn’t fill to generate billions of naira.

Let’s take a look at a personal loan lending platform and how much they charge as interest when you request for loan:

This snapshot above is the interest repayment of N115, 028.69 payable monthly on N620,000 loan request with 7 months tenor. You can see the total amount payable at maturity, N805, 200.83 which is equivalent to 29.8% interest return to the lender.

Isn’t this outrageous? Now, imagine the number of users who request for a loan every day!

My dear, this is what banks make on you when you keep your cash in a savings deposit account for 7 months and in return pay you 1.75% interest (3% x 7/12 months).

These lenders, because they may not have enough capital to finance growing loan request, resort to borrowing more cash from individuals or corporate organisations with a promised return of up to 20 – 39%. The financial opportunities here is to plug in as a registered lender who gives to this registered and CBN-regulated credit company and earn a higher return than the rate on fixed deposit and treasury bills investments.

Click here to Download and Gain Access to all Untapped High-Yield Fixed Deposit Providers in Nigeria & Earn Up to 20-39%

Best Investment Opportunities In Nigeria With Low Risk and High Return

The potential of fixed deposit investment opportunities is no longer held by banks again but personal finance and SME loan lenders who are able to charge higher interest on a quick personal loan to salary earners or business owners to finance short-term needs. The companies have perfected borrowers’ credit and background checks to the extent that they only approve loan whose default ratio is less than 0.5%.  To encourage quick payback, they initiated a model that compensates borrowers who pay on/before maturity with higher loan disbursement, such that if they meet up to their current obligations, they can request for more loan.

Here are the 3 credit providers you can invest in:

Option 1

This is a licensed microfinance bank that offers consumer finance banking services. They started as a credit company before they got approval from the CBN to carry out microfinance operation.

As a lender on their platform, you can enjoy a higher return of up to 22% per annum depending on your capital.  Here is a table showing your deposit sizes, duration and percentage return.

This micro-credit company requires an online registration of potential lenders and verification of identities using BVN and government-issued ID card before approval and if you are successful, you would be required to deposit into their corporate account, once payment is confirmed, you will receive an investment certificate showing the amount invested, maturity date, tenor, rate, WHT and full value.

Here is a typical return on N400,000 invested I invested in this company for 360 days:

Please note the following:

• The interest on this investment is subject to 10% Withholding Tax (WHT).
• The investment and the accrued interest will be rolled over at the prevailing money market rate if we do not receive instruction from you on or before the maturity.
• The terms and conditions as contained in the Fixed Deposit Account Opening Form are hereby incorporated by reference with the same force and effect as though fully set forth herein, which terms and conditions may be changed by the company at any time without prior notice.
• The terms and conditions contained in the Fixed Deposit Account Opening Form can be accessed via Terms and conditions
• Where you request to withdraw funds prior to the maturity date, the may, in its absolute discretion, approve/reject a request for early withdrawal. Where such early withdrawal is approved by the company, a penalty charge of 50% of the accrued interest will be applied.

Option 2 (Exclusive)

This lender offers a better and higher return of 26-39% per annum compared to one mentioned above. The attractive feature of this investment option is that your interest rate is not dependent on deposit size of N20,000, besides, all loan disbursed are insured which means that if borrowers defaults, there is a chance of recouping your cash back.

This is how this option works:

• Browse loans to creditworthy borrows who have passed all18 different credit check and loan criteria.
• Lend to borrowers at a higher rate.
• Earn monthly return; direct deposit to your bank account.
• Pay 1.5% of your return as operation fee.

Options 3 (Exclusive)

This provider has disbursed over N20 billion to 400,000 salary earners in Nigeria.

This is a sample advert from this credit company on BusinessDay Newspaper, one of the most respected business and investment dailies in Nigeria.

As I said, these three platforms are registere and regulated by the Central Bank of Nigeria, so you are assured of capital protection and returns on maturity.

When I discovered these platforms, I don’t even bother about investing in my bank’s fixed deposit offer of 6-9% per annum when I can earn a solid low-risk return of 20-39% per annum.

Would you still invest in your bank’s fixed deposit? I guess it’s a capital NO, then, Click here to Download and Gain Instant Access to the Contact of these Untapped High-Yield Fixed Deposit Providers in Nigeria and Earn Up to 20-39% Per Annum

Contact: You can contact me for inquiries and questions on 08084219399. These providers are CBN regulated and NDIC insured.