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Bank fixed deposit interest rate in Nigeria, How to Calculate it

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Bank fixed deposit interest rate in Nigeria

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Bank fixed deposit interest rate in Nigeria differs expectedly and so the question ”which bank is best for fixed deposit in Nigeria” comes to the fore.

A Tenured Deposit, or a fixed deposit as we commonly know it, is a tenured investment account with a specific amount invested at an agreed interest rate and tenure. Now here is how fixed deposit work in Nigeria.

At the end of the agreed period (tenure), and based on your instructions, the investment can either be re-invested or returned to you with the interest amount earned, and most times the tenure is usually between 30 days minimum to 180 days maximum.

You should also know that the minimum opening balance for this investment starts from ₦100,000 but this could vary with banks. Check with your banker to be sure of this.

Also, your investment amount can be terminated at your discretion.

But if you terminate the investment before maturity, you will have to forfeit the total accrued interest not earned what that means is that the portion of interest earned in the period that your money was in the bank is what will be paid to you.

Bear in mind that the interest paid to you is subject to Withholding tax (WHT), which is usually deducted from the interest you have earned

Bank fixed deposit interest rate in Nigeria

What are the documents needed to open a fixed deposit?

  • Filled fixed-term deposit form which will be provided by the bank
  • Valid means of identification (National ID, Passport, Driver’s license)
  • Utility Bill of Applicant (water rate, tenement, rent receipt)
  • Two passport photographs
  • Customer investment advice

Benefits of fixed deposit account in Nigeria

Fixed returns

A fixed deposit offers guaranteed returns. The rate of interest offered to you when you open an FD remains constant throughout your tenure. Even if the interest rates fall in the broader market, your FD won’t be affected, so you need not worry about the ups and downs of the market.

Hassle-free investment

If you have a savings account, you can open an FD in just a few clicks or by visiting the nearest branch. Once you open it, you don’t have to worry about it till it matures. You can set maturity instructions to automatically renew or get the maturity proceeds credited to your account.

Magic of compounding

If you choose an FD with a reinvestment option, you will benefit from compound interest; what this means is that you will earn interest not just on the principal amount but also on the interest you earn.

Regular income

If you wish to get a regular income, you can opt for monthly or quarterly interest pay-outs.

In addition, investing in a fixed deposit account earns you a higher interest rate than leaving your money in a savings account as FD’s interest rates are highly negotiable.

It is easy to raise a loan against your FD. One can borrow up to 90 per cent of the FD’s amount.

How to calculate fixed deposit interest rate in Nigeria

It’s always a good thing to know how to calculate fixed deposit interest rates in Nigeria as this can help you gain more from your investment.

But if you think it’s complicated, let me simplify it for you.

The two methods used to calculate interest on a fixed deposit are Simple Interest and Compound Interest. Nigerian banks may use both depending on the tenure and the amount of the deposit.

What is the difference between Simple Interest and Compound Interest?

Simple interest is earned only on the principal amount while compound interest is earned on the principal as well as the interest.

Simple Interest

This method is calculated by multiplying the principal, rate of interest and the time period.

The formula for Simple Interest (SI) is “principal x rate of interest x time period divided by 100” or (P x Rx T/100).


P= Principal amount; R = Rate of interest per annum; T= No. of periods (in years)

Now if you invest ₦1,000,000 at 8% p.a. for 5 years, you can calculate the interest like this.

Step 1: 1,000,000 x 8 x 5 = ₦40,000,000

Step 2: Now divide that by 100. You get ₦400,000.

So, the interest you earn for 5 years is ₦400,000.

Therefore, if you invest ₦1,000,000 in a fixed deposit with 8% p.a. simple interest, you will get back ₦400,000 at the end of 5 years.

Compound Interest

In this method, for example, if a bank offers 8% p.a. for a 5-year deposit where the interest is compounded annually and you invest ₦1,000,000, we can calculate the interest as given below:

Year 1
First, we use the simple interest method for the first year.

1,000,000x8x1/100 = ₦80,000

So the interest earned for the first year is ₦80,000.

This amount is added back to the principal. So the principal for the second year becomes ₦1,080,000.

Year 2
Now, in the second year, you will earn 8% on ₦1,080,000.

1,080,000 x8x1/100 = ₦86,400

You earn ₦86,400 interest. This is again added back to the principal. So now your deposit is ₦1,166,400.

Now that is how you calculate the compound interest for the next three years or more.

But some banks compound interest monthly, quarterly and half-yearly. So, instead of calculating it like this, use a simple formula that multiplies the principal amount with the interest rate raised to the number of periods in years.

Remember, bank fixed deposit interest rate in Nigeria is not the same for all tenures. So choosing the longest tenure available, doesn’t mean you will get the highest interest rate.

Let’s now see which bank pays the highest interest rate for fixed deposits in Nigeria.

Fixed deposit rates in nigerian banks 2021

Zenith bank fixed deposit interest rate in Nigeria

Please be informed that Fixed deposit is a service provided by the bank to customers, that offers interest rates within 2.00% dependent on the amount fixed ( Please note the minimum amount that can be fixed is ₦100,000).

It has a Flexible duration of 30,60,90 days and can also be rolled over based on request. You are required to write a duly signed letter requesting for a substantial amount to be deducted from your savings or current account to open the fixed deposit account.

UBA fixed deposit interest rate

The interest for UBA Fixed Deposit are issued per annum and is credited into your account depending on the call period requested for at the business office. UBA seem to prefer negotiating their FD interest rate on a per-customer basis and so they have refused to publish any rate publicly. Kindly visit the nearest UBA branch, complete the form and submit.

First bank of Nigeria fixed deposit interest rate

First Bank Nigeria fixed deposit interest rate starts from as low as 0.25% and could go as high as 6.00% depending on the amount of money deposited and the duration. Please note that the rate is subject to change. For further enquiries on FirstBank’s products and services, please call/e-mail the bank.

Access bank fixed deposit interest rate 2021

The percentage of access bank fixed deposits are all tabulated below:

Days1mn and belowabove N1m≤ N10mabove N10m ≤ N50mabove N50m ≤ N100mabove N100m ≤ N500mabove N500m ≤ N1Billion> N1Billion
30 Days1%1.5%1.75%2%2.5%3%3.5%
60 Days1.25%1.75%2%2.25%2.75%3.25%3.75%
90 Days1.5%2%2.25%2.5%2.75%3.5%4%
180 Days1.5%2.25%2.5%2.75%3%3.75%4.25%
365 Days1.75%2.5%2.75%3%3.25%4%4.5%

Access bank Nigeria fixed deposit rates above are subject to change.

FCMB fixed deposit interest rate 2021

FCMB Fixed Deposit account offers you:

  • risk-free returns on your investment
  • attractive interest rates
  • flexibility of withdrawal at your convenience, however, 24-hour notice is required prior to withdrawal, and runs for a pre-defined tenor.

So you can invest your money and know exactly what you will receive at maturity. It offers the flexibility and convenience to choose a convenient maturity date.

Furthermore, the interest rate is negotiable and depends on the amount to be fixed as well as the duration.

Please note that the minimum amount to invest is presently ₦250,000.00.

Kindly visit any FCMB branch closest to you to open your fixed deposit account the interest rate is disclosed at the branch.

This article was updated 2 months ago


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