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The short answer
A treasury bill pays no interest. You pay less than its face value at the auction and receive the full face value at maturity; the difference, the discount, is your return. For example, a ₦5,000,000 182-day bill at a 16% discount rate costs about ₦4,601,096 and pays ₦5,000,000, a gain of about ₦398,904.
The idea in one line
Buy below face, get face at maturity. Everything else in a treasury bill is detail about how big the gap is and when you receive it. The Central Bank of Nigeria (CBN) sells bills on behalf of the Debt Management Office at weekly auctions, setting a stop rate for each tenor. See how auctions work for the bidding side.
Example 1: a ₦5 million, 182-day bill
Example figures, not a current rate: face value ₦5,000,000, tenor 182 days, discount rate 16%, a 365-day year.
- Discount = 5,000,000 × 0.16 × 182 ÷ 365 = ₦398,904.11
- Price you pay = 5,000,000 − 398,904.11 = ₦4,601,095.89
- At maturity you receive ₦5,000,000
- Your gain = ₦398,904.11
Your bank debits ₦4,601,095.89 on settlement day. 182 days later ₦5,000,000 is credited. No coupons are paid in between.
What that is as a yield
The 16% is calculated on the ₦5 million face value, but you only put in ₦4.6 million. On the money you invested, the return is 398,904.11 ÷ 4,601,095.89 × 365 ÷ 182 = 17.39% a year. That is the true yield. We explain the difference in stop rate vs true yield.
The same result as a deposit
To see why the true yield is the fair comparison, imagine placing the ₦4,601,095.89 in a 182-day deposit paying simple interest of 17.39% a year. Interest would be 4,601,095.89 × 0.1739 × 182 ÷ 365 = about ₦398,969, close to the bill's ₦398,904.11 (the small gap is rounding in the 17.39%). So a bill at a 16% discount and a deposit at roughly 17.4% give the same money over the same period. A deposit quoted at 16% would earn noticeably less than the bill.
The comparison only holds if both are held to the end and neither carries extra charges. A deposit broken early may lose interest; a bill sold early is priced by the market.
Example 2: a smaller 91-day bill
Example figures: face value ₦250,000, 91 days, discount rate 15.5%.
| Step | Working | Result |
|---|---|---|
| Discount | 250,000 × 0.155 × 91 ÷ 365 | ₦9,660.96 |
| Price paid | 250,000 − 9,660.96 | ₦240,339.04 |
| Received at maturity | Face value | ₦250,000.00 |
| True yield | 9,660.96 ÷ 240,339.04 × 365 ÷ 91 | 16.12% a year |
Note that a minimum amount applies. Parthian Partners says on its treasury bills page that some banks start from ₦100,000, while its i-invest app offers bills from ₦10,000; check the minimum with whoever you buy through.
Choosing the face value you want
Some forms ask how much cash you want to invest rather than the face value. Work backwards: Face value = Cash ÷ (1 − d × t ÷ 365). Example: with ₦1,000,000 cash, a 91-day tenor and a 14% discount rate, face value = 1,000,000 ÷ (1 − 0.14 × 91 ÷ 365) = ₦1,036,166.47. You pay ₦1,000,000 now and receive ₦1,036,166.47 at maturity.
What reduces the gain
- Fees: a bank, dealer or app may charge a fee. Example: a ₦1,500 charge on Example 2 reduces the gain from ₦9,660.96 to ₦8,160.96. Check the actual charge on the form or in the app.
- Selling early: if you sell before maturity you get the market price on that day, not the face value. Parthian Partners notes bills can be sold before maturity in the over-the-counter market.
- Inflation: headline inflation was 14.63% in September 2026, per NBS data reported by Voice of Nigeria. A true yield close to inflation leaves little real gain.
- Tax: check the current position; see are treasury bill returns taxed.
Why the discount grows with tenor
Hold the rate fixed and change the tenor, and the discount scales with the days. Example: on ₦1,000,000 face at 15%, the discount is ₦37,397.26 for 91 days, ₦74,794.52 for 182 days and ₦149,589.04 for 364 days. Because the price falls as the discount grows, the true yield rises with tenor too, even at the same quoted rate. That is one reason to compare bills on true yield, not on the headline rate alone, and to choose a tenor that matches when you need the money back. See which tenor to choose.
Check your own numbers
- Write down face value, tenor in days and the discount rate from your allotment confirmation.
- Discount = Face × rate × days ÷ 365.
- Price = Face − Discount. This should match the amount debited, plus any fee.
- True yield = Discount ÷ Price × 365 ÷ days.
- If the bank's figure differs, ask which day count it uses; some calculations use 364 or 360.
Where Pryme fits
Pryme does not issue or sell treasury bills. Money you set aside for the next auction can wait in a Flexible Savings Box, held by Solid Allianze Microfinance Bank, with its rate shown in the app.
Questions people ask
How is treasury bill interest calculated in Nigeria?
T-bills pay no interest. The return is the discount: Face value × discount rate × days ÷ 365. You pay face minus discount and receive face at maturity.
How much will I get if I invest ₦1 million in treasury bills?
It depends on the rate and tenor at your auction. In an illustrative 91-day bill at a 14% discount, ₦1,000,000 buys a face value of about ₦1,036,166, which is what you receive at maturity.
Is treasury bill interest paid upfront?
In effect, yes: the discount is deducted when you buy, so you pay less than face value. You then receive the full face value at maturity.
Why did my bank debit less than I invested?
Your instruction may have been for a face value; the bank debits the discounted price. Ask for the allotment confirmation showing face value, rate and price.
Sources
- Parthian Partners: Treasury bills · accessed Oct 2026
- Voice of Nigeria: Nigeria's headline inflation drops to 14.63 per cent (16 Oct 2026) · accessed Oct 2026
- Nairametrics: CBN offers N450 billion today, second NTB auction of Q4 issuance (14 Oct 2026) · accessed Oct 2026
This article is general information, not financial, legal or tax advice. Products described are provided under the terms on this site and are subject to regulation and eligibility.