Top 10 Nigerian Banks with the Highest Fixed Deposit Interest Rates
Looking to start saving money towards a financial goal this year? Then you might want to consider fixing your money.
By fixing your money, I mean, putting your money into a fixed deposit account, which yields more interest than a normal savings account.
A savings account will help you save money for the short-term, let's say, 1 month to 3 months.
But if you want to save towards a goal that could take up to 1 year to 3 years, then a fixed deposit is more ideal.
In this post, we'll look at a few top banks in Nigeria that offer savers the highest interest rates on fixed deposits.
Apart from the interest rates, we'll also consider the minimum deposit and minimum tenure required to operate a fixed deposit account with each bank.
Let's get right to it.
Access Bank
The Access Bank fixed deposit account is targeted at high networth individuals who are looking to fix their money for both the short-term and the long-term.
Their fixed deposit account requires a minimum deposit of 1 million Naira, with the tenor remaining flexible, between 30 days and 1 year.
They offer a fixed interest rate of 18.25% per annum, with deposits locked until maturity.
Access bank offers an alternative more liquid deposit account, which is the High Interest Deposit Account (HIDA).
The HIDA account offers interest rates between 8% and 10%, with no fixed tenor and monthly withdrawals allowed.
First City Monument Bank (FCMB)
FCMB is offering a fixed deposit account that is flexible in terms of minimum deposit.
They do not specify a specific minimum deposit for a fixed deposit account to qualify for interest, but customers are expected to adhere to the industry standard minimum tenor of 30 days.
Time deposits with FCMB returns an impressive average interest of 13% per annum.
Zenith Bank
Zenith bank currently offers one of the highest interest rates in Nigeria, with interest running up to 12% per annum.
The interesting thing about Zenith bank fixed deposit account is the low barrier to entry, with just 100,000 Naira required to open a fixed deposit account with the bank.
Account balance will have to be maintained for a minimum tenor of 30 days to be eligible for interest. The longer the tenor, the higher the interest rate qualified for.
Early withdrawal is allowed, but will attract a penalty of 20% of accrued interest or 2,000 Naira, whichever is higher.
Union Bank
Union Bank offers a fixed deposit account that can be opened with a minimum deposit of 100k Naira.
The account offers an interest rate that ranges from 8% to 12.5% per annum and can be fixed for a minimum tenor of 30 days.
Early withdrawal attracts a penalty of 1% deduction from total accrued interest.
Stanbic IBTC Bank
Stanbic IBTC fixed deposit accounts start with a minimum deposit of 100k Naira, with a tenor that runs from 30 days to 365 days.
They are offering an impressive interest rate that ranges from 8% to 11% per annum.
Interest rate accrued will usually depend on the tenor of the deposit. At maturity, a 10% withholding tax is applied to final interest earned.
First Bank
First bank offers an average deposit interest rate of 8% per annum.
With a low minimum investment amount of 100,000 Naira, this presents an opportunity for beginner savers and small savers to start small and grow their portfolio.
Fixed deposits with First bank starts with a minimum tenor of 30 days and runs up to 360 days.
United Bank for Africa (UBA)
United Bank for Africa (UBA) is offering a flexible-tenor fixed deposit account that pays out 8% per annum.
The account requires a minimum balance of 100k Naira and can be fixed for a flexible term ranging from 30 days upwards.
This account is targeted at small businesses looking to save towards capital expenses.
Guaranty Trust Bank (GTBank)
GTBank is offering a fixed deposit account that runs from 30 days up to 180 days and pays an interest rate of approximately 8% per annum.
There is no specified minimum deposit to fix your money with GTBank, as they encourage their customers to opt for a standing deposit order.
In fact, GTBank offers a 1% bonus interest for fixed deposit accounts that are funded via a standing deposit order.
A standing deposit order is an instruction to your bank to periodically transfer specific amounts from your savings account to your fixed deposit account, usually at regular intervals.
If you plan to start small and then grow your fixed deposits via periodic automated transfers, then the GTBank fixed deposit account might be ideal for you.
Sterling Bank
The Sterling Bank fixed deposit account requires a minimum deposit of 100k Naira, with a minimum tenor of 30 days.
They offer a tiered interest rate based on tenor. Yields range between 7% and 10% per annum.
A 10% interest can be achieved for deposits fixed at over 61 months.
Fidelity Bank
Fidelity Bank offers a fixed deposit account that pays out an interest of up to 6% per annum.
They allow a flexible tenor starting from 30 days, with no specified minimum balance to qualify for interest.
It is understood that despite not specifying a minimum deposit, customers will earn the maximum interest of 6% based on higher deposits.
Fidelity Bank also offers fixed deposit accounts in foreign currencies such as USD, GBP, and EUR. The average interest rate on these foreign fixed deposit accounts is 5% per annum.
FAQ on Fixed Deposit Accounts in Nigeria
What is the difference between a Savings Account and a Fixed Deposit Account?
A savings account is more liquid than a fixed deposit account which is tenored and can be liquidated only after the tenor elapses.
Hence, a savings account can be used for short-term savings while a fixed deposit account can be used for long-term savings.
How Can You Earn a Higher Interest on a Fixed Deposit?
Most banks offer tiered fixed deposit accounts which offer higher interest rates for longer tenored deposits.
So, you could earn a higher interest rate if you fix your money for a longer period of time.
Can you Receive Interest Earned from a Fixed Deposit Account on a Monthly basis?
Interest earned on a fixed deposit is accrued on a monthly basis, but mostly cannot be paid out unless the tenor elapses or the customer requests an early withdrawal, which most times, comes with a penalty.
Is Fixed Deposit a Good Investment in Nigeria?
Fixed deposits are considered as low risk investments that are made towards long-term goals.
It could also be used by entrepreneurs and small businesses as a stable vehicle for long-term savings towards capital expenditures.