Fixed Deposits in Nigeria

Fixed deposit rates in Nigeria currently range from 12% to 20% annually, depending on the bank, amount, and tenure. Smaller banks and microfinance banks often offer higher rates (15-20%) while tier-1 banks offer 12-15%. Rates fluctuate with CBN's monetary policy rate.

Minimum amounts vary: ₦10,000 to ₦100,000 for most commercial banks, some digital platforms accept ₦1,000+. Higher deposits (₦1 million+) often qualify for better rates. Treasury bills require minimum ₦50,000 through banks or ₦10,000 through mobile apps.

Yes, interest earned on fixed deposits is subject to 10% withholding tax, automatically deducted by the bank before crediting interest to you. The quoted rates are usually gross (before tax). Net return = Gross Rate × 0.9.

Yes, but with penalties. Most banks charge a penalty of reduced interest (often paying only savings account rate) or a flat fee. Some banks require notice periods. Check break terms before investing. Consider laddering deposits for flexibility.

Treasury bills often offer slightly higher rates and are backed by the federal government (risk-free). However, they have fixed tenures (91, 182, 364 days) and less flexibility. Fixed deposits offer more tenure options and may allow partial withdrawal. Both are relatively safe investments.

Interest is typically calculated using simple interest: Principal × Rate × (Days/365). For example, ₦1,000,000 at 15% for 180 days = ₦1,000,000 × 0.15 × (180/365) = ₦73,973 gross interest. After 10% withholding tax, net interest = ₦66,575.

Yes, fixed deposits in banks licensed by CBN are covered by NDIC insurance up to ₦500,000 per depositor per bank. For amounts above this, consider spreading across multiple banks or investing in federal government securities (treasury bills/bonds) for full backing.

Fixed deposits lock funds for a set period with a fixed rate. Call deposits (or money market deposits) allow withdrawals with shorter notice (24-48 hours) but typically offer slightly lower rates. Call deposits suit businesses needing liquidity with better returns than savings accounts.