For Nigerians looking for a relatively low-risk way to grow their savings, Treasury Bills and fixed deposits remain two popular options. But with interest rates changing frequently, the question is simple: which one currently offers the better return?
The latest data from the Central Bank of Nigeria (CBN) gives Treasury Bills a strong advantage, particularly for investors who can lock away their money for one year.
At the CBN’s August 12, 2026 Treasury Bills auction, the 364-day Treasury Bill had a 17.59 per cent stop rate, up from 17.35 per cent at the July 29 auction. The shorter 91-day and 182-day bills recorded stop rates of 16.30 per cent and 16.50 per cent respectively.
The demand for the one-year bill was also striking. Investors submitted N4.19 trillion in bids for just N500 billion on offer, representing an 8.38-times bid-to-cover ratio. Across the three Treasury Bill maturities, total subscriptions reached N4.41 trillion, while N1.46 trillion was eventually allotted.
Treasury Bills are short-term government securities issued through the CBN. Instead of receiving interest monthly like a conventional deposit, investors typically buy the bill at a discount and receive its face value at maturity.
This makes the quoted stop rate different from the actual return on the cash invested. Proshare’s analysis of the August 12 auction showed that the 17.59 per cent stop rate on the 364-day bill translated to a 21.34 per cent true yield.
For example, an investor buying a 364-day Treasury Bill with an investment amount of ₦1 million could expect a gross return of roughly ₦213,400, based on that true-yield calculation, before applicable taxes and transaction-related costs.
Fixed deposits work differently. A customer places money with a bank for an agreed period and receives interest based on the bank’s quoted deposit rate. The major advantage is simplicity: the investor knows the agreed interest rate and maturity date from the beginning.
However, fixed-deposit rates vary considerably from one bank to another and can depend on the amount deposited and the agreed tenor. Therefore, there is no single nationwide fixed-deposit rate that can fairly be compared with the CBN’s Treasury Bill rate.
Using the latest CBN figures, the 364-day Treasury Bill currently offers a 17.59 per cent quoted stop rate, while its calculated true yield was 21.34 per cent at the August auction.
That makes Treasury Bills particularly attractive to investors whose priority is maximising returns while staying within relatively conservative investments.
The attraction is also linked to the government’s strong demand for domestic funding and the CBN’s tight monetary policy environment. The CBN’s Monetary Policy Rate was 26.50 per cent as of June 2026, while the Standing Lending Facility stood at 27 per cent in August.
These elevated policy rates have helped keep returns on fixed-income instruments relatively high.
A higher Treasury Bill yield does not automatically mean it is the best choice for every investor.
Fixed deposits can be more convenient for people who already bank with a particular institution and want a straightforward investment product without navigating the Treasury Bill market.
They may also offer flexibility depending on the bank. Some banks allow customers to negotiate rates, particularly when depositing large amounts, while others offer different rates for different tenors.
The key issue is therefore the actual rate being offered by the bank.
If a bank offers a fixed deposit rate below the current Treasury Bill return, the T-Bill is financially more attractive on yield. But if an investor secures a competitive fixed-deposit rate close to or above the Treasury Bill’s effective return, the difference becomes much smaller.
For an investor with ₦1 million, the choice should not be based solely on the headline percentage.
Treasury Bills currently provide a compelling combination of government backing, relatively short maturity periods and competitive yields. The latest auction’s 364-day true yield of 21.34 per cent demonstrates why investors continue to show strong appetite for the instrument.
Fixed deposits, meanwhile, appeal to investors who prioritise convenience and a predetermined bank interest rate.
Based purely on the latest available market data, Treasury Bills currently have the stronger return proposition, especially at the 364-day tenor. However, investors should compare the actual fixed-deposit offer from their bank with the Treasury Bill’s effective yield, while also considering taxes, fees, liquidity and when they will need access to their money.
