Treasury bills and mutual funds in Nigeria

This page explains how to read the figures we publish on treasury bill auctions, the policy rate and fund categories. It also shows how a savings calculator works. Read the notes below before you compare any numbers.

What this page is for and how to approach it

This page is a reading guide for the figures the engine prints beside each entry on the site. The engine places every number, rate, date and bank name in its own block, so the figures arrive without the explanation that makes them meaningful. The notes here supply that explanation. They describe what an auction result represents, what the policy rate is and how it relates to bill rates, and what the fund category labels mean. They also explain the logic a savings calculator follows when it projects a balance. Read these notes before you compare any figures the engine shows you.

The figures are context, not an offer. An auction rate describes what happened at a sale that has already closed. The policy rate describes a rate the central bank sets for its dealings with banks. A fund category describes what a pooled product holds and how it is managed. None of these is a quote you can accept, and none tells you what you will receive if you act. The engine prints them so you can see how the market is behaving, not so you can treat them as a price on a shelf.

Approach the page in a fixed order. First identify what kind of figure you are looking at, because an auction rate, a true yield and a fund return are measured on different bases and cannot be set against each other directly. Then note what the figure does not tell you, which the later notes describe. Then check the provider's own documents for the terms that apply to you. The engine cannot show those terms, and this page does not substitute for them.

The marginal rate and what it tells you

An auction does not produce a single price for every participant in the room. It produces a marginal rate: the rate at which the last accepted offer was taken. That rate then prices the whole auction, so every buyer whose offer was accepted pays on the same basis, not just the buyer at the margin. Offers that did not reach that level are turned away and receive nothing from that auction.

Read the marginal rate as a statement about where the market settled on the day, not as a personal outcome. It tells you the level at which the government was able to place its paper, and it tells you that some participants wanted a different level and did not get it. Because the rate is struck at the edge of acceptance, it can shift between auctions as demand and the wider rate environment change, even when nothing about the issuer has changed.

What the figure does not show is who was turned away, how much was offered at each level, or how the accepted amounts were split among buyers. It also does not show what any individual holder will keep, since that depends on the price paid and the time held. When you meet the figure on this page, treat it as a market reading and check the auction notice itself for the details the table leaves out.

Why the quoted auction rate is not the return you keep

A treasury bill does not pay interest along the way. It is sold for less than its face value, and the government repays the full face value when the bill matures. The difference between what the buyer hands over and what comes back is the whole of the compensation. That difference is where the return actually lives, and it is why the figure announced after an auction cannot be read as the reward a holder keeps.

The quoted marginal rate is applied to the face value, while the buyer's money is tied up in the smaller discounted amount actually paid. Spread the same gap over the months until maturity and express it against the sum that left the buyer's pocket, and the resulting true yield sits above the quoted figure. The shorter the time to maturity, the more pronounced this effect becomes, because the discount is packed into a briefer period. Anyone who lines up a quoted auction figure beside a fund return without adjusting for this is comparing two different measurements.

To follow the arithmetic yourself, work through these steps:

Establish the price paid and the face value repaid.

Take the gap between them as the reward in naira terms.

Divide that gap by the price paid.

Scale the result to a full year using the days remaining to maturity.

The figure the engine prints for an auction is the rate set at that sale, not a forecast of what a buyer will keep. Check with the provider how any yield figure was calculated, and on what price and day count it rests.

The policy rate and how it pulls bill rates

The central bank sets the policy rate for its own dealings with banks. It is a rate for that relationship, not a rate for you. When you see it printed on this page, treat it as a marker of the stance the central bank is taking with the banking system, not as a figure you can earn on a bill or a fund.

That marker does not fix bill rates. The government borrows through auctions, and the rate that emerges depends on the bids submitted and accepted on the day. What the policy rate does is pull. When it moves, the rate the government must offer on new bills tends to move in the same direction, because the alternatives open to the banks and other buyers have shifted. The pull is a tendency, not a rule, and it can be uneven across auction dates.

Existing bills are unaffected by later policy rate moves. A bill keeps the rate it was sold at until it matures, so a change in the policy rate does not rewrite the terms of something you already hold. The pull shows up in new issuance, not in the stock of bills already in existence. This is why a bill bought earlier and a bill bought after a policy move can sit side by side in your holdings with different economics.

Check with the provider how it describes the link between the policy rate and the figures it publishes, and whether it flags the auction date behind each marginal rate. That tells you which policy stance was in force when the rate was struck.

Reading the tables and calculators the engine prints

Each figure the engine prints arrives in its own block, so treat every block as a separate fact rather than reading the page as one continuous statement. A rate printed beside an auction belongs to that auction. A rate printed beside the policy rate belongs to the central bank's dealings with banks. A date printed beside a bill tells you the tenor of that bill, not the tenor of anything else on the screen. Before you compare two blocks, check that they describe the same kind of thing: the same instrument, the same tenor and the same basis of measurement. A figure from one block placed beside a figure from another block can look comparable while measuring different things.

The savings calculator on this page shows mechanics, not a forecast. It takes the inputs you enter and applies the arithmetic step by step so you can see how a balance is built from a starting amount, a rate applied over time and any additions you make. Change one input at a time and watch how the printed result responds; that is the useful part. The result is an illustration of how the calculation works, not a statement about what any product will pay you, and it cannot account for charges, taxes or changes in rates that a provider may apply.

Some things are deliberately not shown. The page does not list funds or managers, does not rank products and does not tell you which figure applies to your own situation. Where a block is blank or a field is missing, treat that as information the engine does not publish rather than as a zero. With the provider, confirm the basis of any rate you are quoted, the tenor it applies to, the charges that sit between a quoted figure and what you keep, and how the provider calculates the values it shows you.

Comparing on the same basis

A marginal rate, a true yield and a fund return are three different measurements, and putting them side by side without adjustment mixes units. The marginal rate is a price-setting figure from a single auction. The true yield is a calculation you make from the discounted price and the face value across the time to maturity. A fund return describes the change in a unit price over a chosen period, after the fund's own costs. Each answers a different question, so a comparison only works when every figure is expressed on the same basis and over the same horizon.

To align them, decide first what you are measuring: the outcome of holding a bill to maturity, or the change in value of a pooled product over a period. Then bring each figure to that basis before you set them against each other. A quoted auction figure and a published fund return will not match simply because both appear as rates on a screen; the underlying conventions differ, and treating them as interchangeable produces a comparison that looks tidy but means nothing.

Check the basis behind any figure you intend to use:

Whether the figure is a discount rate, a yield to maturity or a period return.

Whether costs and charges are already deducted or still to be taken out.

Whether the period covered matches the holding period you have in mind.

Whether the figure is fixed at purchase or can change with the value of underlying holdings.

Where the basis is unclear from the engine's output, treat the figure as unverified and confirm the convention with the provider before you rely on it in any comparison.

Bills and funds are different products

A treasury bill is a debt of the government. When you buy one and hold it to maturity, the government repays the face value, so the outcome is known at the moment of purchase. The figure you see on this page describes the auction, not your personal result, and the amount you eventually receive at maturity is fixed by the terms of the bill itself rather than by later trading in the market.

A mutual fund works differently. Your money buys units in a pooled product, and the unit price is set by the value of what the fund holds. That price can fall as well as rise. No face value is repaid to you at any point; what you get back depends on the unit price when you sell. Two buyers who enter the same fund on different days can therefore have different outcomes from identical amounts, which cannot happen with a bill held to maturity.

Fund categories are described by what they hold and how they are managed. A money market fund holds short term debt and aims for steadiness. A bond fund holds longer debt, and its unit price moves more when rates change. An equity fund holds shares and can swing widely. A balanced fund mixes these. Each category carries a different level of risk, and a past unit price tells you little about the next one. This site does not publish a list of funds or managers, because a list would read as a suggestion. Use the category descriptions to understand what a product is, then read the fund's own documents before you decide.

With a bill, the repayment at maturity is set when you buy; with a fund, the value at sale is not.

A bill is a direct debt of the government; a fund is a pooled product holding other assets.

Fund unit prices move with the value of holdings; a bill held to maturity does not.

What the fund categories describe

A fund category is a description of holdings and of the way those holdings are managed, not a label of quality. The engine prints the category name beside each fund entry; read it as a statement about what sits inside the pool and how actively the manager trades it, and nothing more.

A money market fund holds short term debt and aims for steadiness of unit price. A bond fund holds longer debt, so its unit price moves more when rates change. An equity fund holds shares and can swing widely. A balanced fund mixes these holdings, and its behaviour depends on the mix the manager keeps.

Check what the fund holds and the maturity of that debt or the kind of shares.

Check how the manager is bound to manage it, since rules on holdings shape the risk.

Check the fund's own documents for fees and for how the unit price is struck.

Risk differs across the categories because the holdings differ. A past unit price tells you little about the next one, and the category name does not tell you what you will receive. Where the engine shows a category beside a fund, treat it as a starting point for reading that fund's documents, and confirm the holdings and management rules with the provider before you rely on the label.

What is not shown and what to check with the provider

The engine prints the figures it holds and leaves out the rest on purpose. It does not publish a list of funds or managers, and it does not rank products against each other. It does not show what a fund charges, how a fund has performed over time, or what a provider will pay on any given day. Auction tables show the result of a past auction, not the terms of a future one, and they do not show the settlement mechanics or the minimum amount a buyer must commit. Where a figure is missing, treat the gap as a prompt to look elsewhere rather than as an invitation to guess.

A common misunderstanding is to read a quoted auction figure as money in hand, or to compare a fund's published unit price with a bill's quoted rate as though the two were the same measurement. Another is to assume the policy rate sets what a bill will pay; it influences the market but does not fix any individual rate. Readers also mistake a category description for a description of a particular product, and assume a steady past unit price says something about the next one. None of these readings hold.

Before deciding, take these questions to the provider:

What exactly is the product, and what does it hold?

What charges apply, and how are they taken?

How and when can money be withdrawn, and what notice is needed?

What documents set out the terms, and where can they be read?

What happens to the value if market rates move?