Hi folks, this is the second series being birthed from our article Understanding
Treasury Bills in Ghana. Kindly refer to this article if you have no idea as to what Treasury Bills are, its benefits and
shortfalls. Don't forget to check our FAQs for more information.
Treasury Bills in Ghana currently have a 91-day, 182-day and 364-day fixed investments period and today I am going to take
you through on how the 182-day investment period works. So read on and increase your investment knowledge set
What is a Treasury Bill?
A Treasury Bill or T-Bill, is a short term debt security made available by the Bank of Ghana (BOG). Treasury bills are
assigned a face value, and this is how much the bill is worth if held throughout the period. For Treasury Bills investment,
you buy the bills at a discounted price and hold them until the end of the period. Once the period ends, or reaches maturity,
you receive the face value. It's as simple as that. You gave the government a short-term loan by buying Treasury Bills, and
they paid you back with "interest" at the end of the period.
Related Posts
- 182-day Treasury Bill
- Understanding Treasury Bills
- 3 Proven Reasons Why People Lose Money in Investment
What is 182-Day T-Bill?
A 182-day Treasury bill (T-bill) is a short-term debt instrument issued by the Bank of Ghana (BOG) with a maturity period of 182 days, or six months. 182-day T-bills are sold at a discount from their face value, meaning investors buy them for less than their eventual maturity value. When the 182-day T-bill matures in about six months time, the government pays the full face value, and the difference between the purchase price and the face value is the investor's interest, or profit.What Are The Key Features of 182-Day T-Bill?
Low-risk
- Treasury Bills are backed by the government, making them one of the safest investments.
Short-term Maturity
- 182-day treasury bill offers a very safe place to save cash for a short duration. So rather can letting your money sit iddle, let it work for you.
Tax Advantages
- Interest income is exempt from state and local taxes.
No Interest Rate Risk
- Sold at a discount and redeemed at face value, avoiding fluctuating interest rates.
- Not affected by interest rate changes during the investment period.
Easy to Purchase
- Can be bought directly from the government or through financial institutions.
- No need for a broker or complicated investment process.
Bank of Ghana 182-day Treasury Bill Rate (%)
23.8124
How Does This Rate Work For You?
Let's say you want to invest an amount of GHS300 into the 182-day treasury bill.To calculate your return on a 182-day Treasury bill (T-bill) investment, you can use the following formula:
Purchase Price = Face Value × (1 - (Discount Rate × Days to Maturity / 365))
Where:Face Value is the amount you will receive at maturity (in this case, GHS 300).
Discount Rate is 23.6341% (0.236341 in decimal form).
Days to Maturity is 182.
Let me calculate the purchase price and return for you or use our T-Bill Calculator.
If you invest GHS 300 in a 182-day Treasury bill at a discount rate of 23.6341%, your purchase price will be approximately GHS 264.65. Your return (profit) at maturity will be about GHS 35.35.
There you go. That's pure, no effort and non-taxable profit earned on your money which hitherto could have been lying down iddle.
Tips To Earn More Profit in 182-Day T-Bill Investment
- You need to invest at least GHS500 to see improved profits
- Have a plan to re-invest initital money and accrued profits as many times as possible.
- Monitor this blog for updates on new and improved treasury bill rates.
- Have a plan to split your investment monies into two or more portfolios.
Frequently Asked Questions
A Treasury Bill is a short term debt security made available by the Bank of Ghana (BOG). In short, loans granted to the government by citizens of Ghana.
Treasury Bills with 182-day investment periods matures approximately 6 months.
Treasury Bills can be bought directly from the Bank of Ghana. Other renowned banks you can acquire T-Bills are GCB Bank, Ecobank, Access Bank, GTBank and Databank.
Yes. Infact, investing in Treasury Bills is one of the safest ways to invest your funds since it is backed by the government.
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