Investing in stocks and fixed income assets appears to be a complex thing to do for many, but that shouldn’t be the case. Investing in treasury bills and notes is particularly one of the easiest things to do with your money.
Treasury bills in Ghana have high rates and many individuals and financial institutions see it as the first point of call when investing. Issued every week in recent times, the instrument is available for all Ghanaian nationals. The results of the auction are often published on the Bank of Ghana website every week. Investing in treasury bills should not be a difficult task
Here are the steps you take
- Determine how much money you want to invest
- Walk to or call your banker or brokerage firm
- Request to buy treasury bills
- Complete your forms
- And pay for your money to your bank or instruct them to debit your account
This is what many forget to do before buying treasury bills:
First, find out what rate the most current bills and notes were issued at. This gives you information on what rate you could be getting at the next auction. It is usually not materially different from the previous rate – a few basis points.
Secondly, seek advice from your banker. Ask where rates are trending towards and whether that time is appropriate for you to invest in a long term instrument or a short term instrument.
You must also know when exactly you would need your money back. If you need your money back in about 3months, then go for the 91day treasury bill, and not the 1year treasury note simply because it has a higher rate at the time you’re buying and also because your banker assures you that it can be discounted for you whenever you need it.
The discounting sometimes cuts deep into your interest earnings, and if you are not fortunate, some banks could wipe all your interest earned in the course of discounting your bills or notes for you.
Treasury bills and notes are safe assets and for the risk averse, it is one of the instruments you should be looking at when investing in Ghana. At the end of the year, not many stocks and funds are able to outperform the Treasury bill.
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