Retail investors’ eye 15.71% return as DMO opens July bond offer

The Debt Management Office (DMO) has opened subscriptions for the July 2026 Federal Government of Nigeria (FGN) Savings Bond, offering investors returns of up to 15.716 per cent per annum, the highest interest rate under the retail bond programme this year.

The subscription window, which commenced on July 6, will close on July 10, while settlement is scheduled for July 15, 2026.

The offer, announced by the DMO on behalf of the Federal Government pursuant to the DMO (Establishment) Act 2003 and the Local Loans (Registered Stock and Securities) Act, is aimed at encouraging savings, deepening financial inclusion and providing Nigerians with access to low-risk, government-backed investment opportunities.

For the July issuance, the DMO is offering a two-year FGN Savings Bond due July 15, 2028, at 14.716 per cent per annum, and a three-year bond due July 15, 2029, at 15.716 per cent per annum.

The new rates represent an increase of about 94 basis points over the June 2026 offer, when the two-year bond carried a yield of 13.777 per cent, while the three-year instrument offered 14.777 per cent.

The savings bonds are priced at N1,000 per unit, with a minimum subscription of N5,000 and a maximum investment of N50 million.

Investors will receive interest payments quarterly on October 15, January 15, April 15 and July 15, while the principal will be repaid in full at maturity.

The DMO said the bonds are backed by the full faith and credit of the Federal Government of Nigeria and charged upon the general assets of the federation, making them among the safest domestic investment instruments available to retail investors.

The instruments also enjoy tax exemptions under the Companies Income Tax Act (CITA) and the Personal Income Tax Act (PITA) for eligible investors, particularly pension funds.

The DMO urged interested investors to subscribe through stockbroking firms appointed as distribution agents under the savings bond programme.

Financial market analyst, Okugbe Abiodun, say the significant increase in coupon rates reflects prevailing conditions in Nigeria’s fixed-income market, where yields have continued to rise amid tight monetary conditions.

Okugbe said the DMO appears to be repositioning the FGN Savings Bond to remain attractive to retail investors as Treasury Bills and Open Market Operation (OMO) instruments continue to offer higher yields.

Market analysts also believe the higher yields provide an opportunity for investors to lock in attractive returns over the medium term, particularly if interest rates moderate in the coming years.

However, Mrs. Kudirat Hassna observed that the upward adjustment underscores the Federal Government’s higher domestic borrowing costs, a consequence of the sustained high-interest-rate environment driven by the monetary authorities’ efforts to curb inflation and stabilise financial markets.

She added that despite the increased cost of borrowing, the FGN Savings Bond remains an important instrument for broadening retail participation in government securities while promoting a savings culture among Nigerians.

With returns now above 15 per cent on the three-year tenor, analysts expect strong demand during the five-day subscription period, especially from retail investors seeking secure investments that outperform conventional savings and fixed deposit accounts.