Business Idea #8 – DO NOTHING, Move Cash from Savings into Treasury Bills

Business Idea #8 – DO NOTHING, Move Cash from Savings into Treasury Bills

This daily series focuses on business ideas for those looking to launch new ventures in Nigeria (and Africa in general). The short ideas are archived here.

The Problem

One of the best business ideas to consider is simply DO NOTHING. Yes, you do not have to put that money in any business venture. Yet, you want that money to work for you, possibly beating inflation. There are options: savings, fixed deposit and treasury bills [all are insured or protected by the sovereign power of the Nigerian people, to a limit]. The challenge is selecting one among these three options if you decide to do nothing. In other words, choose a strategy that delivers (meager) returns while protecting the principal. It is key to note that investment is not just starting a company. Indeed, you can invest by putting your cash in treasury, savings or fixed deposit.

The Opportunity

Treasury Bills has many benefits. One of those benefits is tax benefits [you pay lesser on taxes compared with most other income sources offered in the financial sector]. Besides, Treasury Bills has rates that hover above 10%.  Savings account investment is typically sub-optimal in Nigeria with low single digit rate. Savings rate will not necessarily beat inflation in Nigeria. Fixed deposit delivers better rates but you need to have more money to unlock the higher rates. Also, it requires warehousing the money for a long term which may not be possible depending on the personal situations.

Action Roadmap

Setup an automatic instruction with your bank to invest a specified amount from your account (savings or current) in Treasury Bills. They will roll it over monthly. You get paid the interests and at the end of the month, the automatic instruction reinvests the money in Treasury Bills. Note that some Nigerian banks do not allow this automatic instruction anymore. They expect you to come in person to re-issue the instructions [they do not want you to move the money out of the bank to the Central Bank. When you move it, they cannot use it to lend to customers]. But if you are diligent, you can do that monthly [over leaving it there for nothing especially if you can spare that cash for 30 days] or use banks that allow automatic rollover. Finally, I have detailed options here to consider including other alternatives besides the three I have briefly discussed here.

The following are the options, based on my synthesis of the scenario. This is happening as I am typing. The thought-process is how long it took me to type this, which is live.

  • Fixed deposit: You fix the money for three years in a good bank in Nigeria. That will do better than TB

  • Treasury bills: This can be substituted with the fixed deposit for higher returns

  • Stock market: You look for some good stocks especially in banking and invest. The risk is there but most are so beaten that they have no room to fall further.

  • Agribusiness: You explore agro-investing through aggregation with those doing so. Read my works on Aggregation Construct by searching There are companies doing so. I listed some in my new book

  • Trade financing: You contribute to finance trade in some Igbo men going to China. But you need to have the right people. They mop money and use that money to bring container. This is a thriving business in Aba and Onitsha as most have shunned banks owing to the fees. And with the good returns, some people are taking risks. They offer good contracts and in some cases provide collateral as they own shops. Make it formal.

  • Startup/Angel investing: This is off for you as the 3 years will be too short for any meaningful support to the startup. You need to have a window of about 6 years to invest here


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4 thoughts on “Business Idea #8 – DO NOTHING, Move Cash from Savings into Treasury Bills

  1. Hello Prof, thank you for the information.
    Please elaborate further on why a 3 year fixed deposit investment will yield higher return than investment in treasury bills.

    1. That is culled from another piece. It may be good to read that also. Largely, depending on the amount and tenor, you can get a fixed deposit rate above 15%. Unity Bank offers 16%. If the amount is large, you can get 18%. TB averages 12%. Again, look at the amount, and duration for the fixed deposit.

      1. Thanks a lot. I have done some mental calculation something last month on how I could be earning 1m monthly in the sixth year if I invest in treasury bills with 15% return.


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