By Babajide Komolafe

In the last edition, we explained how to buy TBs from the CBN through the banks. This is called primary market transaction.

The second way to buy TBs is to buy from those who want to resell their own. This is what is referred to as secondary market transaction. The secondary market is where products are resold.

The secondary market provides opportunity for people in urgent need of cash, who have invested in a financial instrument to sell it before the maturity date.

Secondary market TBs are usually through investment banks or firms. These firms are licensed by the CBN and Securities and Exchange Commission, SEC to issue or offer financial instruments to raise money for interested borrowers and also trade in such financial instruments.

These firms also provide regular information on TBs available for sale in the secondary market, including the maturity date and interest rate. In most cases, the minimum amount to be invested in secondary market TBs is N100,000 million.

To buy TBs via the secondary market, you would have to open an account with one of the licensed investment firms. You can visit the website of the Securities and Exchange Commission, SEC, for a list of investment firms licensed to offer such service.

The account opening process could take more than a week, depending on how soon you are able to provide necessary ‘Know Your Customer’ documents, namely Government issued means of identification, utility bill, passport photo etc. When the process is concluded, you will be issued an account number which would be used to book your investment. Thereafter, you can contact the firm for information on secondary market TBs and the terms, choose the one you prefer and transfer your money.

You can choose to deduct the interest rate upfront or even reinvest it. If the amount to be invested is N100,000 and interest rate is N10,000. Deducting the interest rate upfront means you pay N90,000, and you will receive N100,000 when the TB matures.

Reinvesting the interest means you pay N100,000 and you will be paid N110,000 when the TB matures.
After making payment for the TBs purchase, the investment firm is mandated to issue you a certificate of investment. Furthermore, you should schedule in your calendar or email, a reminder on the maturity date for yourself. If the TB is to mature December 25th, 2025, you should set a reminder for December 18th, 2025.

On that date you should send an email to the investment firm with a directive to pay into the designated account or reinvest the money for you.