Fixed Deposit Accounts Interest Rates of All Banks in Nigeria

Are you seeking to know average interest rates offered by Nigerian banks on fixed deposit accounts, to help you decide on which bank to open such account? 

In this article, we have provided a compilation of the average fixed deposit accounts interest rates offered by all banks in Nigeria 

The interest rates captured here are average interest rates these banks offer. In other words, timing or duration of the fixing affects the exact interest rates payable on the accounts, and interest rates are subject to change over time.

In choosing a bank to operate a fixed deposit account, you should not only consider high interest rates. Also consider other important factors such as service delivery (customer service), security, convenience, minimum opening balance, banking technology, automated savings, documentation (opening requirements).

We covered both the commercial and merchant banks.

Merchant banks seem to offer high average interest rates on fixed deposits than commercial banks.

List of Interest Rates of Fixed Deposit Accounts in Nigeria 

Access Bank: 13.31

Citibank: 5.0

EcoBank: 11.87

FBN Quest Merchant: 7.36

FCMB: 10.50

Fidelity Bank: 7.0

First Bank of Nigeria: 4.84

FSDH: 11.42

Globus Bank Ltd: 4.0

Greenwich Merchant Bank: 12.0

Guarantee Trust Bank: 7.45

Heritage Bank: 10.50

Keystone Bank: 12.69

Nova Merchant Bank: 15:29

Polaris Bank: 11.79%

Premium Trust: 9.52

Providus Bank: 9.75%

Rand Merchant Bank: 8.96

Stanbic IBTC: 5.59

Standard Charted Bank: 2.79%

Sterling Bank: 12.69%

SunTrust Bank: 10.20

Titan Trust Bank: 4.90

UBA: 1.0%

Union Bank: 8.0%

Unity Bank: 10.0%

Wema Bank: 7.73%

Zenith Bank: 5.0%

What's Fixed Deposit Account?

Alt="bundles of money and coins in a bottle"

A fixed deposit account is a type of savings account in the bank where a fixed amount of money is deposited for a fixed period, usually ranging from a few months to several years, at a fixed interest rate. Fixed deposit account is also referred to as a timed deposit account. The amount deposited cannot be withdrawn until the maturity date, else, the withdrawal will attract a penalty charge. Fixed deposit account has low-risk investments and usually offers higher interest rates compared to regular savings or demand deposit accounts.

Things to Know about Fixed Deposit Account 

Fixed deposit account has both merits and demerits; and all of them have to be put into consideration be deciding to operate such an account.

Benefits of Fixed Deposit Accounts

Stable Returns

Fixed deposit account provides predictable and stable returns because the interest rate is fixed for the entire tenure of the deposit.

Higher Interest Rates

Fixed deposit account usually offers highest average interest rates compared to regular savings and demand deposit accounts, making it an good option for conservative investors looking for better investment returns.

Safety

Timed deposit account is considered low-risk investment because it’s most times insured by the government up to a certain limit, providing security for the deposited funds. It also helps depositors fight the temptation is unnecessary spending of savings.

Flexible Tenure Options 

Banks offer a variety of tenure options on fixed deposits, allowing customers to choose the duration that best suits their financial goals, ranging from a few months to several years.

Financial Discipline

By fixing your funds for a specific period, fixed deposit accounts encourage saving and discourage unnecessary spending.

Easy Access

Although, the savings are fixed for a period of times, many banks allow premature withdrawal of fixed deposits in case of emergencies, which may incur a penalty.

Loan Facility

Some banks offer the option to take loans against fixed deposits, providing liquidity without having to break the deposit, where the deposit serves as collateral.

Demerits of Fixed Deposit Account 

Despite the fact that fixed deposit account offer many benefits, it also have some limitations.

Limited Liquidity

Unlike savings and current accounts, fixed deposit accounts have a fixed tenure, and withdrawing funds before maturity often come with penalties, reducing liquidity.

Interest Rate Risk

If interest rates rise after you've locked in your funds in a fixed deposit, you miss out on the opportunity to earn higher returns on your savings.

Inflation Risk

Fixed deposit interest rates may not always keep pace with inflation, which could reduce your purchasing power over time.

Opportunity Cost

By locking up your funds in a fixed deposit, you may miss out on investment opportunities with potentially higher returns, especially in the case of long-term investments.

Minimum Deposit Requirements

Some fixed deposit accounts require a minimum deposit amount, which may be higher than what you're able to invest.

Tax Implications

Interest earned on fixed deposits is usually taxable as per your income tax slab, reducing the potential returns.

Reinvestment Risk

When a fixed deposit matures, if prevailing interest rates are lower than what you originally earned, reinvesting the funds may result in lower returns.

Requirements to Open Fixed Deposit Account

Requirements, in terms of documentation, to open fixed deposit account in Nigeria are almost the same for all the banks. What differs is using the minimum account opening balance.  Some banks require higher opening balance than the others. While some others operate zero opening balance.

The required information to open a savings account in Nigerian banks include:

  • Passport photograph
  • Means of identification: Any ID issued by the government such as Nigerian passport, Driver's license, National Identity Card, Voter's Card
  • National Identity Number (NIN)
  • Bank Verification Number (BVN): You will be required to provide your BVN, where you don't yet, you will have to do it in the bank.
  • Means of Address Verification: A proof that you reside in the address you provided. Means of Address Verification include utilities bill such as NEPA bill, house rent receipt etc.

Ikechukwu Evegbu

Ikechukwu Evegbu is a graduate of Statistics with over 10 years experience as Data Analyst. Worked with Nigeria's Federal Ministry of Agriculture and Rural Development. A prolific business development content writer. He's the Editor, Business Compiler

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