The Secrets to Making Money through Bank Fixed Deposits in Nigeria – A lot of people don’t know this, but the banks in Nigeria where you have your savings account can pay you for leaving your money with them. The bank does this by paying you interest on the amount of money that you leave there, typically in the form of an annual percentage yield (APY).
While there are several other details related to how and when banks calculate APY and pay it out, one thing to keep in mind is that they are legally required to disclose all fees and rates associated with their bank accounts, so you know exactly what you are getting into before signing up.
What is a Bank Fixed Deposit in Nigeria?
A fixed deposit in Nigeria is a time deposit account which you can only withdraw from after a set number of months. Most banks in Nigeria offer FDs for terms ranging from 30 days to 365 days. You have to keep your money in a fixed deposit account for at least that period of time, and usually, you will receive a higher interest rate for doing so. Also, the more money you invest in a fixed deposit account over a longer period of time, the higher the interest rate and return on investment.
Best Interest Rates on Fixed Deposits in Nigeria
There are a number of factors that affect how much interest you will earn on your investment. The most important factor is what kind of FD you invest in and where you open it. There are three major factors that affect your returns ·
Type of deposit: This depends on how long you want to keep your money in a fixed deposit, for example, 30 days or 365days.
Amount: This depends on how much money you want to put into Fixed Deposit, e.g., N100,000 or N1 million ·
Where you invest: Different banks have different rates so choose wisely!
Inflation rate: There are other things that may influence how much interest you make in a fixed deposit such as the inflation rate.
As a general rule, longer-term deposits tend to pay higher rates of return than shorter-term ones.
How to Calculate Interest on Fixed Deposits in Nigeria
Step 1. Find out how much interest you are earning on your fixed deposit. This will be given to you at least once a year when they send you your annual statement. For example, if your Annual Interest Rate is 8%, then 8% of your balance is earning interest each year. This means that for every N1,000 initially deposited, by end of one year, you will have N1,080 in total due to interest earnings.
Step 2. Calculate how long it will take you to double your money using only interest income. To do so, divide 20 by (Annual Interest Rate – 1). For example, if your Annual Interest rate is 8%, then 20 divided by 7 equals 2 years and 4 months. In other words, it would take about two years and four months for you to double your money using only interest income from your fixed deposit account in Nigeria.
Step 3. Calculate how long it will take you to triple your money using only interest income. To do so, divide 30 by (Annual Interest Rate – 1). For example, if your Annual Interest rate is 8%, then 30 divided by 7 equals 4 years and 6 months. In other words, it would take about four years and six months for you to triple your money using only interest income from your fixed deposit account in Nigeria. The above calculation assumes that no withdrawals were made during those periods.
Also, Fixed deposits can be calculated using a simple interest method, which means that the key elements to consider are; The Principal, Tenor, and Interest rate.
For example, let’s calculate how much money you will make if you invest the sum of N2,000,000 in a fixed deposit account with a particular bank in Nigeria for a 30-day tenor and the bank offers you an 8% interest rate.
Principal – N1,000,000
Rate – 8%
Tenor – 30 days.
How to Calculate the Interest Earned
= 2,000,000 x 0.08 x 30/365 = N13,150.685
The interest on the above investment will be N13,150.685
Top Banks in Nigeria with High-Interest Rates for Fixed Deposits
Best Banks For Fixed Deposit In Nigeria – This is where you make money. Different banks in Nigeria offer different interest rates, and there are even some special fixed deposit accounts that yield higher than usual interest rates. So, if you are trying to figure out how to make money through bank fixed deposits in Nigeria, it’s worth looking at all your options. One of these high-interest rate fixed deposit accounts might be a good fit for you. In addition to keeping an eye on general interest rates, you should also keep an eye on specific products from individual banks in Nigeria; sometimes they will have special promotions or new offerings that can help increase your return.
Below are a few top banks in Nigeria with great fixed deposit products:
• Fidelity Bank
• GTBank
• Ecobank Nigeria
• United Bank for Africa (UBA)
- Access Bank Nigeria plc
- First City Monument Bank (FCMB)
How to open a fixed deposit account in Nigeria: Opening up a new account is often as simple as going into your local bank branch and speaking with someone at one of their customer service desks.
Best Time To Open a Fixed Deposit Account in Nigeria.
The best time to open a Fixed Deposit account is when interest rates are high. If you can’t find anyone to help you, go straight to your bank and make sure they are available there.
You will be required to fill out a form that requires your name, address, phone number, and other details about yourself such as a
A Valid means of identification (Your National ID, International Passport, Driver’s license).
Your Utility Bill receipt (Electricity, water rate, tenement, rent receipt).
2 passport photographs.
This form is called the Know Your Customer (KYC) form. After filling it out completely, give it back to the bank officials for processing.
They will then give you some forms to fill out like how much money you want to put on a fixed deposit, what period of time you want to deposit it for, and so on.
Make sure all these forms are filled up correctly before handing them over to them. And also tell them how much interest rate would suit you best because the different banks in Nigeria have different interest rates depending on their policies and how long they have been operating as well as their credit rating among other factors that determine their ability to pay back clients who invest with them.
Once you have filled all these forms properly, they will send them to their head office where they carry out further checks and evaluations before approving or rejecting your application. Once approved, you will receive a call from one of the bank officers informing you that your application has been accepted.
They will also inform you how much money should be deposited into your account for it to be opened successfully. However, if any additional information is needed from you regarding anything else just let them know so that everything can proceed smoothly without any hitches or delays.
How To Open a Fixed Deposit Account in Nigeria.
The first step is to open a bank account. If you do not have an account with any bank in Nigeria, go to one near you and apply for one. This will take no more than 15 minutes. Below are the documents you will need to open a fixed deposit in Nigeria.
- Filled fixed term deposit form which will be provided by your bank.
- Provide a valid means of identification (Your National ID, Passport, or Driver’s license).
- Provide a Utility Bill (Electricity, water rate, tenement, rent receipt).
- 2 passport photographs.
- Provide Customer investment advice.
After your application has been approved, you can now proceed to fund your fixed deposit account with the sum of N100,000 being the minimum amount for a fixed deposit in Nigeria. Remember that all fixed deposits are not tax-free and interest rates are about 7% – 12%.
FAQ about Bank Fixed Deposits In Nigeria.
If you are thinking about opening a fixed deposit account with your bank in Nigeria, there are some general things that you should know. As is often said, knowledge is power and your understanding of how a fixed deposit works will empower you when it comes time to decide on one. Below is what you need to know.
How do I open a fixed deposit account?
How much money do I need to open an FD?
What interest rate can I expect from my FD?
How long does it take for my money to earn interest?
When can I withdraw my money from an FD?
Can I get out of an FD before the maturity date?
What happens if I die before the maturity date and how do they pay out my beneficiaries?
How do I check my Fixed Deposit balance online?
How do I apply for an overdraft facility on my Fixed Deposit account?
How can I use multiple branches of different banks at once to maximize FD interest earnings?
How to make money through Bank Fixed deposit in Nigeria: The best way to make money from a fixed deposit (FD) is by making sure you keep your funds invested for as long as possible.
This means not withdrawing any of your money before the maturity date. If you have no need for that cash, it’s always better to wait until the maturity date and get back all of your principal and interest earnings.
However, if you are desperate for some cash and can’t wait until the maturity date, there are ways to withdraw early without losing out on earnings.
You can apply for an overdraft facility or use multiple branches of different banks at once to maximize Fixed Deposit interest earnings. Banks in Nigeria offer Fixed Deposit accounts with varying terms – from one month up to 1 year. The longer you leave your money in a Fixed Deposit account, the more interest you earn.
