A while ago, I audited my finances and realised that I had a small sum of money sitting in my savings account, which I was receiving less than N1,000 monthly interest on. Since I didn’t need this money immediately, I decided to research fixed deposit accounts offering higher interest rate in the short term, until I needed the money back. Fixed deposits are a very popular investment option in Nigeria, and you’ll hear about them 8 times of out 10 if you do happen to ask for advice regarding how to invest money. A fixed deposit investment is an attractive option if you do not want to encounter the risks involved in starting a new business venuture as returns are guaranteed, and the duration of your investment is flexible. I have done this sort of research before, comparing fixed deposit interest rates between GTBank and FirstBank, which you can find here.
What is a fixed deposit?
A fixed deposit is a lump sum deposited with a bank for a fixed period amount of time, in exchange for interest.
How to put your money in a fixed deposit
You will need to have an existing account with the bank of your choice. You will then need to speak to your bank manager, telling them how much you want to “fix”, and for how many days. Most banks allow you to fix your money for 30 days, 60 days, 90 days, 180 days and 1 year. It is very important that you check with different banks to compare rates, as you can open a new account for this purpose if your banks rates are not competitive enough. If just picking up the phone and making calls can earn you an extra N1,000 each month, then it’s worth it and what’s more, I have done some of the hard work for you. 20% OFF Select Professional Grade Surge Protectors w/ code 07P15CPP at Newegg Business, ends 9/30
How do I get paid?
Usually, the money you want to fixed is removed from your account and the interest is paid into your account monthly. So for example, you want to fix N500,000 for 60 days and the bank has offered you an interest rate of 7%. You have N550,000 in your account. Once you confirm you’re making the arrangement and sign all the necessary documentation, the N500,000 “disappears” from your account to be “fixed”.
How is fixed deposit interest calculated?
- Multiply the interest rate by your fixed amount. In the example above, 7% x N500,000 = N35,000.
- Divide the result by 12 months: (N35,000/12 months) to get your monthly payments (N2,916).
- Subtract 10% tax: N2,916 – N292 = N2,624 payable monthly
Bank interest rate comparisons
We have worked out monthly returns on a deposit of ₦500,000 based on these rates:
Some additional points Diamondbank – Minimum term: 30 days. Minimum amount: N1m Skye bank – Minimum term: 30days. Minimum amount: N500,000 StanbicIBTC – Minimum term: 30 days. Minimum amount: N100,000. If you are interested in fixing for 1 year, StanbicIBTC offers the highest fixed deposit rates at 12% for amounts fixed fixed for a whole year.
Please note that these rates are only offered as a guide, as actual rates vary weekly and interest is paid based on the variable rates set by the banks. Please ensure that you call the bank to get current rates before you make an investment.
Am I an agent? I work for neither of these banks. My selection of this two is purely by chance and accessibility of contact information via the bank websites. I simply picked the banks with the most prominent contact information via websites. My reviews are unbiased, and if I haven’t reviewed any others yet, don’t worry – “life is turn by turn”.