DMO’s August 2025 FGN Savings Bonds: 2‑Year & 3‑Year Bond Yields See a 1.361% decline

The Debt Management Office (DMO) has announced the opening of subscriptions for the August 2025 issuance of Federal Government of Nigeria (FGN) savings bonds, with interest rates dropping modestly compared to the previous month.

Investors can now access the 2-year bond at 14.401% and the 3-year bond at 15.401% per annum, both reflecting a 1.361% decline from July.

The subscription window runs from Monday, August 4, to Friday, August 8, 2025. Investors can purchase bonds at N1,000 per unit, with a minimum subscription of N5,000 and in multiples of N1,000 thereafter, up to a maximum of N50 million.

The 2-year bond matures August 13, 2027, while the 3-year bond matures August 13, 2028. Interest payments are made quarterly on February 13, May 13, August 13, and November 13 each year.

The slight reduction in rates, down from July’s 15.762% and 16.762% respectively, is likely tied to the Central Bank of Nigeria’s (CBN) continued hold on its benchmark Monetary Policy Rate at 27.5%.

This monetary policy stance aims to combat inflation and stabilize the naira, making Nigerian debt instruments more affordable for the government.

However, the decline in bond yields will see an increase in the price of existing bonds, and might discourage foreign portfolio investors (FPIs) or local investors seeking higher returns in the Fixed-income market.

Results from the July 2025 auction reveal strong demand, with a total allotment of N4.27 billion. The 2-year bond saw N853.822 million allotted across 1,078 successful subscriptions, while the 3-year bond attracted N3.4 billion from 1,591 subscribers, indicating growing investor preference for longer-term instruments.

Despite the modest decline in yields, August’s FGN savings bonds remain a competitive, low-risk investment option in Nigeria’s fixed-income market. Backed by sovereign credit and listed for tradability, the bonds continue to offer an accessible and tax-efficient avenue for both retail and institutional investors.