FGN Savings Bond Yields Fall as DMO Opens October Offer

The Federal Government has cut the interest rates on its latest savings bond offer, with investors set to earn 13.071 per cent on the two-year instrument and 14.071 per cent on the three-year bond. The Debt Management Office announced the rates in its October 2026 offer circular released on Monday.

The new three-year rate is a drop from the 15.12 per cent offered on the same tenor in September. The October offer opened on 5 October and will close on 9 October, with settlement scheduled for 14 October.

Terms of the Offer

The two-year FGN savings bond matures on 14 October, 2028, and carries a coupon of 13.071 per cent per annum. The three-year instrument is due on 14 October, 2029, and offers 14.071 per cent annually. That gives the three-year bond a one-percentage-point premium over the two-year paper.

Interest payments on both securities will be made quarterly on 14 January, 14 April, 14 July and 14 October. The bonds are backed by the full faith and credit of the Federal Government and will be redeemed through bullet repayment at maturity.

Each unit is priced at N1,000, while the minimum subscription is N5,000. Investors can increase their holdings in multiples of N1,000, subject to a maximum subscription of N50m.

The FGN savings bond remains targeted at retail investors seeking access to government securities with relatively low entry requirements.

Tax and Liquidity Treatment

The securities qualify as government securities under relevant tax laws and as eligible investments for trustees under the Trustee Investment Act. They can also be recognised as liquid assets for banks when calculating liquidity ratios.

The lower rates come as the domestic fixed-income market continues to adjust to changing interest rate conditions.

Demand Still Rising

The latest offer lands amid stronger demand for FGN savings bonds during 2026. Between January and September, allotments reached N47.25bn, according to the available figures.

That is an increase of N11.02bn compared with the N36.23bn allotted during the corresponding period of 2025. The rise points to stronger participation in the retail government securities market despite fluctuations in yields during the year.

For retail investors, the offer is a chance to lock in fixed quarterly income through government securities with different maturity periods, though at lower returns than the September window. The direction of yields will matter for savers weighing these bonds against other fixed-income options.