In a country like Nigeria where bills such as rent and school fees are often paid periodically, finding a strategic and reliable way to manage these payments is essential for financial stability. While many Nigerians keep idle cash in savings accounts, a smarter and more profitable alternative exists—investing in treasury bills (T-bills).
Treasury bills offer not only a way to grow your money safely but also a highly effective system to plan for major recurring expenses. Whether you’re saving towards school fees every term, rent every year, or bi-annual payments, there is a treasury bill tenor that can match your timeline.
This feature article breaks down everything you need to know about using treasury bills as a rent or school fees payment plan, and how you can take advantage of this risk-free government-backed investment to achieve financial efficiency.
What Are Treasury Bills?
Treasury bills are short-term debt instruments issued by the Federal Government of Nigeria through the Central Bank of Nigeria (CBN) to borrow money from the public. The tenors are usually 91 days, 182 days, and 364 days.
Here’s the interesting part: T-bills are sold at a discount. For instance, you may purchase a ₦100,000 T-bill for ₦85,000, and at maturity, you receive the full ₦100,000. The difference is your interest.
Treasury bills are among the safest investment options because they are backed by the government, making them risk-free, unlike stocks or forex investments that are volatile and uncertain.
Why Treasury Bills Instead of Regular Savings?
Many Nigerians keep large amounts in their savings accounts for school fees, rent, or emergencies. Unfortunately, the interest on savings accounts in commercial banks often ranges between 1% to 4% annually.
Meanwhile, according to FSDH indicative rates, treasury bills currently offer returns as high as 19.65% per annum, depending on the tenor and auction rate. This means your money works harder for you, without the need for daily monitoring or fear of market fluctuations.
Here’s another interesting fact: banks take your savings and use them to buy treasury bills themselves. They earn the interest, while you earn crumbs. Instead of helping the bank grow, why not take control and invest directly?
How Treasury Bills Can Help You Pay Rent and School Fees
1. 91-Day T-Bills – Perfect for Termly School Fees
If you’re a parent whose children attend schools that operate on a termly or semester basis, the 91-day treasury bill is perfect for you. You can invest just after paying the current school fee, and in three months, your money will be ready—with profit—to pay the next one.
This system can become a cycle:
- Pay fees → invest leftover funds in 91-day T-bills → use proceeds to pay next term’s fee.
2. 182-Day T-Bills – Ideal for Biannual Expenses
Some bills come every six months—such as advance tuition for private institutions, hostel accommodation, or health insurance plans. If this applies to you, then the 182-day T-bill is your best fit. You can set aside funds six months in advance, invest in T-bills, and have both capital and profit ready when the payment is due.
3. 364-Day T-Bills – Best for Annual Rent or Vacation Plans
In Nigeria, rent is typically paid yearly, and it can be a significant financial burden when it’s time to renew. Instead of leaving your rent money idle in a bank, investing in the 364-day T-bill allows you to:
- Lock in your funds safely.
- Earn substantial interest.
- Have the full rent (plus bonus) ready at the end of the year.
This also applies to vacation planning, family events, or even business projects scheduled for the next year.
Step-by-Step Guide: How to Buy Treasury Bills in Nigeria
Many people want to invest in T-bills but don’t know how. Here’s a simplified process:
Step 1: Choose a Platform
You can invest through:
- Banks (especially Tier 1 banks like GTBank, Zenith, Access, etc.)
- Licensed investment firms or fintech platforms (like Cowrywise, Bamboo, Piggyvest, etc.)
Step 2: Fund Your Account
Before the auction date (usually twice a month), fund your account with the amount you wish to invest. Minimum investments vary by platform, but it’s typically around ₦50,000 to ₦100,000.
Step 3: Indicate Your Preferred Tenor
Choose whether you want to invest in 91-day, 182-day, or 364-day T-bills based on your payment plan.
Step 4: Submit Your Bid
There are two types of bids:
- Competitive bidding: You set your desired interest rate (mostly used by institutional investors).
- Non-competitive bidding: You agree to accept whatever rate the CBN offers (most retail investors go this route).
Step 5: Receive Interest and Capital
At maturity, you get your full capital and interest, which you can now use for school fees, rent, or reinvestment.
Real-Life Scenarios of Treasury Bill Use
Let’s break this down with a few practical examples.
Example 1: School Fees Plan
- A mother has ₦300,000 saved for her child’s next term school fees.
- She invests ₦270,000 in a 91-day T-bill at 15% interest.
- At maturity, she receives ₦310,500—enough for school fees and extra cash for books or transport.
Example 2: Rent Planning
- A worker living in Lagos pays ₦800,000 yearly rent.
- In January, he receives a bonus and sets aside ₦700,000.
- He invests it in a 364-day T-bill at 18%.
- In December, he receives ₦826,000—enough to pay his rent with some balance left.
Example 3: Student Investment
- A university student working a side gig saves ₦100,000 every 3 months.
- He repeatedly invests in 91-day T-bills, earning returns every cycle.
- By the end of the academic year, he’s grown his savings to ₦472,000 instead of ₦400,000—a gain for doing nothing but planning wisely.
Who Should Consider Treasury Bills?
- Parents with children in school (especially private schools)
- Landlords or tenants preparing for yearly rent
- Students saving towards tuition or living expenses
- Small business owners with fixed-term capital needs
- Salary earners saving for large bills or future purchases
- Anyone tired of low interest from savings accounts
Pros and Cons of Using Treasury Bills for Bill Planning
ProsCons
Safe and risk-free Funds are locked until maturity
Higher returns than savings Minimum investment may be high for some
Helps with financial discipline Rates may fluctuate per auction
Suitable for structured bill payments Inflation can reduce real value
Final Thoughts: Financial Planning with Purpose
Using treasury bills as a rent or school fees payment plan is not just a smart financial move—it’s a strategic way to ensure financial stability in a country where expenses are high and savings interest rates are poor. It’s about turning your idle funds into a tool for growth, matching investment timelines with your life’s financial demands.
In a volatile economy like Nigeria’s, having a structured, risk-free investment like treasury bills can be the difference between financial strain and peace of mind. So, the next time you’re tempted to leave that ₦500,000 in your savings account, ask yourself: Why not let it grow while I wait?
