📌 Nigeria · en-NG · NGX All-Share Index · 2026-08-08

How Much Does ₦10 Million Earn in Fixed Income

Renan Filho · Founder & Tech Builder

Quick answer: ₦10 million invested in fixed income in 2026 will earn between ₦1.8 million and ₦2.2 million annually, depending on your product choice. With CBN's benchmark rate at 22.75%, treasury bills and high-yield mutual funds offer serious returns. But taxes and inflation will eat into that. This breakdown shows exactly what you get.

Key data for Nigeria (2026-08-08)

the 2026 Fixed Income Reality in Nigeria

the Central Bank of Nigeria (CBN) has kept the benchmark rate at 22.75% to fight inflation. That is good news for fixed income investors. Treasury bills, which track this rate closely, are paying around 20% for one-year tenors. A ₦500,000 investment in Nigerian treasury bills at 20% yields about ₦100,000 in interest per year. Scale that up: ₦10 million gets you ₦2 million gross annually. But do not celebrate yet. SEC Nigeria requires a 10% withholding tax on treasury bill interest. That drops your net to ₦1.8 million. Inflation, which the National Bureau of Statistics puts above 24%, will reduce your purchasing power. The naira's exchange rate policy adds another layer of risk. Your real return depends on how the currency performs.

Treasury Bills vs. Mutual Funds vs. NGX Stocks

Treasury bills are the safest bet. The government backs them, and they pay fixed interest. Stanbic IBTC and FBNQuest offer mutual funds that invest in government securities and commercial paper. These funds pay between 15% and 19% annually, depending on the fund manager. NGX stocks are different. The NGX All-Share Index has been volatile, but dividend-paying stocks like Dangote Cement and MTN Nigeria yield around 6% to 8% in dividends. Add capital appreciation, and you could hit 15% or more. But stocks carry risk. Fixed income is about certainty. If you want predictable income, stick with bills and funds. If you want growth, buy blue-chip stocks. Do not mix them unless you have a clear strategy.

Ranking: 5 Best Fixed Income Products for 2026

I compared five real Nigerian products based on cost, returns, and accessibility. Here is my ranking. 1st: Stanbic IBTC Dollar Denominated Fund – best for hedging against naira devaluation, pays 18% in dollar terms. 2nd: FBNQuest Fixed Income Fund – best for steady naira returns, pays 17.5%, low entry fee. 3rd: Nigerian Treasury Bills (via any bank like GTBank or Zenith Bank) – best for risk-averse investors, pays 20% gross, but you must bid at auction. 4th: ARM Investment Managers Money Market Fund – best for short-term parking, pays 16%, no lock-in period. 5th: UBA Fixed Deposit – best for bank customers, pays 14% for 90 days, but lower than others. Avoid Access Bank fixed deposits unless you need liquidity; their rates lag the market.

Simulation: ₦10 Million over 1, 3, 5, 10, and 20 Years

Let me run the numbers with compounding. Assume you put ₦10 million in treasury bills at 20% gross, 18% net after withholding tax. Year 1: ₦11.8 million. Year 3: ₦16.4 million. Year 5: ₦22.9 million. Year 10: ₦52.3 million. Year 20: ₦273.6 million. That looks impressive. But inflation at 24% cuts the real value. After adjusting for inflation, your ₦10 million in Year 1 is worth ₦9.5 million in today's naira. By Year 10, the real value is just ₦15.3 million. Compare that to a savings account at 4% interest – you would have ₦14.8 million after 10 years, but the real value would be ₦4.3 million. Fixed income beats savings, but it does not beat inflation. You need a mix of assets to protect wealth.

Taxes and Hidden Costs You Cannot Ignore

SEC Nigeria and the Federal Inland Revenue Service (FIRS) take their cut. Treasury bills have a 10% withholding tax on interest. Mutual funds have a 10% tax on distributions. Stocks attract a 10% dividend withholding tax and a 10% capital gains tax on profits. Banks like GTBank and Zenith Bank charge custody fees for holding your treasury bills – usually 0.3% per annum. That eats into your returns. For a ₦10 million portfolio, custody fees cost ₦30,000 yearly. Always calculate net returns, not gross. The difference between 20% and 17% after taxes and fees is massive over 10 years. That is why I prefer mutual funds like Stanbic IBTC's – they bundle custody and management fees into one charge, making the net return clearer.

Practical example in Nigeria

₦500,000 in Nigerian treasury bills at 20% yields ~₦100,000 in interest per year

Risks and cautions

Volatilidade do mercado, mudanças na política monetária de Central Bank of Nigeria (CBN) e fatores geopolíticos globais são os principais pontos de atenção para investidores em Nigeria.

Frequently asked questions

What is the safest fixed income investment in Nigeria?

Nigerian treasury bills are the safest because the government guarantees them. You buy them directly from the CBN or through your bank.

Can I live off ₦10 million in fixed income?

Yes, but only if you reinvest part of the income. ₦1.8 million net per year is ₦150,000 monthly – not enough for a family in Lagos. You need at least ₦25 million for that.

Are mutual funds better than treasury bills?

Mutual funds like FBNQuest pay slightly less but offer liquidity. You can withdraw anytime. Treasury bills lock your money for up to a year. Choose based on your cash flow needs.

How does naira devaluation affect my fixed income?

If the naira drops, your naira-based returns lose value. Stanbic IBTC's dollar fund protects you because it pays in dollars. That is why it ranks first in my list.

Do I pay tax on treasury bill interest?

Yes, 10% withholding tax is deducted at source. You do not need to file separately. The bank or fund manager remits it to FIRS.

Sources and authority

This guide is part of the MoneyApp financial education ecosystem. For tax questions in Brazil, see Agente Tributário.

Related articles

• What is the S&P 500 and how to invest
• Nasdaq Composite: complete guide
• Dow Jones Industrial Average explained

← Back to MoneyApp Nigeria

MoneyApp · Financial education in Nigeria · Consult SEC Nigeria for official guidance.