Treasury bills back home pay 17%. Why not send my savings there?

The question

An illustrative letter.

The answer

My dear, your cousin is not wrong about the number. Nigerian treasury bills do pay far more than an American savings account. At the Central Bank of Nigeria's auction on September 9, 2026, the one-year bill sold at 16.62 percent, down from 17.59 percent two weeks earlier. Next to 4 percent here, keeping your money at home can start to feel timid. But the rate is only half the story, and it is the half that is easiest to see.

Why does the exchange rate matter so much?

Your $15,000 would first be changed into naira, earn its interest in naira, and then, one day, be changed back into dollars. If the naira weakens in between, each naira buys fewer dollars when you bring the money home. Between June 2023 and February 2024, the naira lost about 69 percent of its value against the dollar on the official market, sliding from about 470 naira to more than 1,500. No treasury bill pays enough to make up for a fall like that.

How far can the naira fall before 4 percent wins?

Here is a simple sum, leaving out fees and taxes.

• Kept here at 4 percent, $15,000 grows to $15,600 after a year.
• Sent home at 17 percent, it grows to the naira equivalent of $17,550, if the exchange rate does not move.
• If the naira falls about 11 percent against the dollar over that year, those naira buy only about $15,600, the same as staying home.

So the high rate gives you a cushion of roughly 11 percent. If the naira falls by more than that in a year, the dollar account comes out ahead, and the naira has fallen by far more than 11 percent in a single year within recent memory. Then add the costs: you lose a little changing dollars into naira, and again changing them back, and the rate you are actually offered may be worse than the official one.

Why do the bills pay so much?

Interest rates are partly a price for risk. When a government pays 16 or 17 percent, it is usually because prices are rising quickly there, and investors want to be paid for holding a currency that may lose value. For someone who earns and spends in naira, treasury bills can make good sense. For someone whose rent, groceries and retirement are all in dollars, the currency is the whole game.

What are the U.S. rules if I invest abroad?

• Tax. The United States taxes its citizens and residents on income from anywhere in the world, so interest earned in Nigeria belongs on your U.S. return. A credit for foreign tax paid may reduce what you owe.
• Reporting. If your accounts outside the United States add up to more than $10,000 at any point in the year, you must file a Report of Foreign Bank and Financial Accounts, known as the FBAR, with the Treasury. It is due April 15, with an automatic extension to October 15. With $15,000 abroad, you would likely need to file, and the penalties for missing it can be steep.
• Protection. At home, deposits at an insured bank are protected by the FDIC up to $250,000 per depositor, per bank, per ownership category. That protection does not follow your money overseas.

A CPA who works with immigrants can tell you exactly how these rules apply to you.

When might sending money home make sense?

When the money has a job in Nigeria. If you plan to build a house there, pay school fees there or retire there, holding some savings in naira can match the money to where it will be spent, and the currency risk shrinks. Even then, many people keep control by holding the investment in their own name, rather than handing it to a relative to manage, however trusted.

If you simply want your savings to grow, there are ways to aim for higher returns in dollars, with risks you can see, such as long-term investing in a diversified retirement account. Those carry their own ups and downs, but at least the currency is the one you live in.

Before you move a sum like $15,000 in either direction, it can help to sit down with a financial adviser who is paid by you rather than by commissions on what you buy. A good one looks at the whole picture: your emergency fund, your goals in both countries, your taxes and how much currency risk your family can truly carry. That conversation costs far less than a wrong turn with your savings.

How do I answer my cousin?

Kindly, and with the sum above. You might say: "The rate is good. But my life is in dollars, and if the naira falls more than about 11 percent this year, I lose. I will keep my safety net here." Being careful is not the same as being scared. It is knowing which risk you are taking.

Your love for home is a fine thing, my dear. Let it show in what you build there, not in your emergency savings. Keep the money you cannot afford to lose in dollars, and let only spare savings take the currency risk.

One thing to do this week

Write down what this $15,000 is for and when you will need it, then work through the 11 percent sum with those dates in mind.