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Nairaland Forum / Nairaland / General / Business / What Is The Difference Btw Treasury Bill And Fixed Deposit (38281 Views)
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Re: What Is The Difference Btw Treasury Bill And Fixed Deposit by deenee: 8:08am On Jan 07, 2018 |
Both are interest bearing financial assets. However note this TB is government backed while FD is not TB is tax exempt while FD is not TB is issued at a discounted rate and redeemed at par while FD can be issued with interest paid back end or upfront. Both can be liquidated prematurely however at a cost. The minimum tenor for TB is 91 days and max of 365 while FD is usually monthly (30days) up to 365 days. Also there are some FD on call As per interest rates, up until now TB had higher rates than FD however rate is not the best criteria to distinguish between both as this is more of operational meaning rates can oscillate both ways for the two financial instruments. For those looking to build long term wealth. I advise you have a portfolio with varying asset classes to hedge for risk. Ie cash, FD/TD equity and other classes of assets they deem fit. Funny thing is people always avoid the equity market like it's a plague but know this in any economy there will always be a boom and bust. Oil prices will always go up and down same for dollar. This is what capitalism is all about. When the naira really down against the dollar I told people that this was the right time to buy naira assets but they refused and some converted their assets to dollars. Some even put money in al sorts of ponzi schemes and got their fingers burnt. Now for those that study the market well. Compare the prices of the following stocks in Jan 2017 and now Fidelity, Dangote sugar dangote cement stanbic Zenith fbn uba access dangote flour and ROI that a 1m investment will have made in 12months both in capital appreciation and dividend payments The bitter truth is only long term investors make money ask Warren buffet and study his investment philosophy. On the other hand Nigerian are always looking for the quick way out. 8 Likes 1 Share |
Re: What Is The Difference Btw Treasury Bill And Fixed Deposit by obashiakpu(m): 8:09am On Jan 07, 2018 |
Beress: It is not calculated that way. That 12% is per annum and which will give you about 120k for a year and 30k for 90 days for N1m. 2 Likes |
Re: What Is The Difference Btw Treasury Bill And Fixed Deposit by Mrviktor(m): 8:09am On Jan 07, 2018 |
id2011:Bro bank would collect all those many charges.. By the time u know u have only 5-6 % as interest.. Insurance doesn't take any charges.. Fixed deposits interest we give up to 10% at aiico insurance.. Very very good if u ask me.. Plus within the 1 year or years depends on how long u want to keep the money. The person has a death cover of 1m plus the money her deposited 1 Like |
Re: What Is The Difference Btw Treasury Bill And Fixed Deposit by money121(m): 8:10am On Jan 07, 2018 |
Doerstech: Invest in crypto |
Re: What Is The Difference Btw Treasury Bill And Fixed Deposit by boiz2men(m): 8:12am On Jan 07, 2018 |
arrestdarrester: Could you please tell me why? |
Re: What Is The Difference Btw Treasury Bill And Fixed Deposit by northvietnam(m): 8:13am On Jan 07, 2018 |
kingpole: I have done both... Land do take time to appreciate but it's the safest for me. Been into transport shaaa.. A cousin bought a truck (tipper) for 3.5m (2016), he traveled back abroad so I was looking after the teuck... The first driver messed the truck up cuz he was related to us ( wasn't doing account weekly which is 60k dry season 45k to 50k raining season). After some months I returned the truck home then started consultation. After all set and done, I took 400k and returned the truck better than it was when they bought it... Then I put it up for higher purchase... I told our priest( catholic) and he also made the announcement in church service.. It took small time shaaa but I finally got a serious man.. he made deposit of 500k before he took the truck and is returning 62500 weekly... sometimes he do return double of the money in a week so we just do check and balance... As I'm talking to you now, his conductor is begging secretly to couple a sound truck for him... That he's ready for my terms and conditions... You might not like the biz style but it's ok for me. Banks will tell yo they want to bid for the TB , that you should deposit money in an account wich you can't withdraw again, once they are done with the biding of what ever they are bidding the money dsiappears.. and u will be making peanuts as gain 4 Likes |
Re: What Is The Difference Btw Treasury Bill And Fixed Deposit by Moahmed: 8:15am On Jan 07, 2018 |
XXLDICK: Just like fixed deposit, you can terminate your TBills anytime. You don't need to wait till maturity. |
Re: What Is The Difference Btw Treasury Bill And Fixed Deposit by Moahmed: 8:17am On Jan 07, 2018 |
henryomez: Wrong you can do tbills for as low as 200k. |
Re: What Is The Difference Btw Treasury Bill And Fixed Deposit by Moahmed: 8:18am On Jan 07, 2018 |
henryomez: you can do tbills for as low as 200k. |
Re: What Is The Difference Btw Treasury Bill And Fixed Deposit by FabioPeter: 8:19am On Jan 07, 2018 |
Google it na! |
Re: What Is The Difference Btw Treasury Bill And Fixed Deposit by FrenchWay: 8:20am On Jan 07, 2018 |
Atiku2019:Niger state. Currently its about 20-25k. But I don't know if there are states that have them invheaper quantity. In august or so, a bag would sell for like 50 and above |
Re: What Is The Difference Btw Treasury Bill And Fixed Deposit by crowntoro(f): 8:21am On Jan 07, 2018 |
Beress:Nope, you cannot get up to that |
Re: What Is The Difference Btw Treasury Bill And Fixed Deposit by Moahmed: 8:21am On Jan 07, 2018 |
Beress: In 90days you get 1000000*90*12/36500= 29598.04 |
Re: What Is The Difference Btw Treasury Bill And Fixed Deposit by Hallenjay: 8:23am On Jan 07, 2018 |
northvietnam:doesn't meet ur expectations? Share wit us |
Re: What Is The Difference Btw Treasury Bill And Fixed Deposit by Mmadu111: 8:29am On Jan 07, 2018 |
Beress:If it's that way then I'm supposed to billionaire, lol...stop dreaming 2 Likes |
Re: What Is The Difference Btw Treasury Bill And Fixed Deposit by Doerstech(m): 8:29am On Jan 07, 2018 |
money121: That's a different thing all together, we are talking about instruments available in the banks Funny enough last Friday I had a chat with one of the banks I use on these things.... rather than keep money in an ordinary savings account, one can use one of these |
Re: What Is The Difference Btw Treasury Bill And Fixed Deposit by naijarazzi: 8:30am On Jan 07, 2018 |
Sage7: No, FD’s interest can be received either upfront (at point of debit) or back end (after maturity) The interest varies. Sometimes, TB can b higher or lower depending on how well the govt wants to mop up money from the economy. TB doesn’t have a fixed tenor, it varies day by day. There’s 57 days, 105 days and more. While FD varies from 39 days to 180 days. The minimum investment amount on TB is 100k 1 Like |
Re: What Is The Difference Btw Treasury Bill And Fixed Deposit by northvietnam(m): 8:30am On Jan 07, 2018 |
Re: What Is The Difference Btw Treasury Bill And Fixed Deposit by deenee: 8:30am On Jan 07, 2018 |
northvietnam: Every business has risk and the risk should be equal to the return. TB is risk free and can still guarantee a yield of 30% yearly if the upfront interest is invested in another asset class. You are lucky to have gotten someone to manage your truck well for you and that don't mean another person will have the same luck. Transport business doesn't always work the way you have put it. I have invested in transport business twice first as a corper serving in the north ( got a water truck and leased it out to someone to be fetching water for corpers at a cost) and also a truck. The experiences were not too good but thankfully I got my capital out. Point I am making is that investment is a matter of opinion and risk appetite. My parents only do TB because it is risk free and they can sleep well at night knowing that their life savings is intact. The best is to give the pros and cons without bias and leave the decision to the person. 4 Likes |
Re: What Is The Difference Btw Treasury Bill And Fixed Deposit by Doerstech(m): 8:33am On Jan 07, 2018 |
kingpole: Just spotted that Withholding tax thing in the doc I collected from my bank when I went to enquire about these. I understand there's a penalty for those that pulls out before the end of the fixed deposit tenure 1 Like |
Re: What Is The Difference Btw Treasury Bill And Fixed Deposit by deenee: 8:33am On Jan 07, 2018 |
post=63966805: TB is sold in 91day 182 day and 365 day tranches at primary auction unless you are buying from the secondary market of which they will re discount TB already sold at the primary auction for you through open market operations |
Re: What Is The Difference Btw Treasury Bill And Fixed Deposit by Hallenjay: 8:34am On Jan 07, 2018 |
guardiola:it's not true... .I once tried fd last two years and fcmb gave me 5% bt der tax n other calculation reduce d interest |
Re: What Is The Difference Btw Treasury Bill And Fixed Deposit by Ryabcool(m): 8:34am On Jan 07, 2018 |
ecolime:it makes sense if you're investing huge. You would not be having this mindset if you're investing a billion. You'd feel safer investing a billion naira in treasury bills than a business you're not completely sure will not make a loss. The wealthy enjoy the benefits of treasury bills than the average joe 6 Likes 1 Share |
Re: What Is The Difference Btw Treasury Bill And Fixed Deposit by bigpicture001: 8:37am On Jan 07, 2018 |
Sage7:...am baffled, not by your response alone,but by the so many like's you got from it..a simple question was raise about what the difference between two forms of investment are..instead of to broadly explain what they are.you instead delved into its differences in returns without actually saying what each of them are thereby still making people that don't know what they mean to still be awe as of what they mean.had you been.my student,i would have scored you 2/10. am surprised dou at the art of like's you got |
Re: What Is The Difference Btw Treasury Bill And Fixed Deposit by 1zynnvn(m): 8:37am On Jan 07, 2018 |
pol23:I was thinking the 12 percent is for 1year?? Then for your 90days you'll get (((12%xCapital)/365)x90 ) |
Re: What Is The Difference Btw Treasury Bill And Fixed Deposit by chinnyonwu(m): 8:38am On Jan 07, 2018 |
Beress:Wrong. The rate is calculated annually. N1m will give you 140,000 after 1 year if its 14% rate. Very poor right? Its not poor to some people though.. Different people, different risk appetite |
Re: What Is The Difference Btw Treasury Bill And Fixed Deposit by manshoro: 8:38am On Jan 07, 2018 |
Treasury bill involves instant interest received with the principal held in CBN for 90 days. Fixed Deposit is for a period of One month plus with interest paid to the owner of the money who made the deposit. My father in 2012 made a deposit of N1,000,000 with an instant N24,000 as interest received (i.e with C.B.N). Also, he made a Fixed Deposit of N500,000 with GTBank for a period of 31days plus and received an interest of N2,400. With this I hope it will help.? thanks. 1 Like |
Re: What Is The Difference Btw Treasury Bill And Fixed Deposit by Doerstech(m): 8:39am On Jan 07, 2018 |
northvietnam: While you have a point there, the FD and TB are more secured and less risky than buying of Land ( which is a very good one both on short and long term ) as you may fall into wrong hands and lose your money completely. 1 Like |
Re: What Is The Difference Btw Treasury Bill And Fixed Deposit by YelloweWest: 8:40am On Jan 07, 2018 |
12345baba:A horrible administration but yes we do. |
Re: What Is The Difference Btw Treasury Bill And Fixed Deposit by aolawale025: 8:41am On Jan 07, 2018 |
Sage7: TB are issued by government. It can be discounted before maturity FB - some form of FB pay interest upfront. FB are issued by banks |
Re: What Is The Difference Btw Treasury Bill And Fixed Deposit by amicable09(f): 8:41am On Jan 07, 2018 |
crowntoro:Lol. The guy will have to print that amount himself as interest |
Re: What Is The Difference Btw Treasury Bill And Fixed Deposit by daneni1(m): 8:41am On Jan 07, 2018 |
ladyF: Lol...........Only if u know that T.Bills is a secure style of investment. instead of losing ur money, u rather breakeven wen it matures. 1 Like |
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