Maturity value of a term deposit, net of the 10% WHT on interest.
Net maturity value
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Gross interest
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Withholding tax (10%)
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Net interest
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Worked example
Take a deposit of N2,000,000 at 18% a year for 12 months, compounded monthly. The deposit compounds at 1.5% a month over twelve months and grows to about N2,391,236, so the gross interest is about N391,236. The bank withholds tax at 10% on that interest, which is about N39,124, leaving net interest of about N352,113. The net maturity value, the amount that actually lands in your account, is the principal plus the net interest, about N2,352,113. Banks usually advertise the gross rate, so the headline figure overstates what you keep. The withholding tax is generally the final tax on bank interest for individuals, so there is normally nothing further to pay.
Item
Amount (NGN)
Gross interest
391,236
Withholding tax at 10%
39,124
Net interest
352,113
Net maturity value
2,352,113
How it is calculated
The calculator compounds your principal to maturity. The maturity value is the principal times one plus the periodic rate, raised to the number of periods, where the periodic rate is the annual rate divided by your chosen compounding frequency and the number of periods is the tenor in years times that frequency. Subtracting the principal gives the gross interest. It then applies the 10% withholding tax to that gross interest to get the tax and the net interest. The net maturity value is the principal plus the net interest. Note that the tax falls only on the interest, not on the principal, which is your own money returned. For an individual, this withholding is usually the final tax on the interest, so the net figure shown is what you actually keep. Always compare the net figure across banks rather than the advertised gross rate.
Frequently asked questions
Is fixed deposit interest taxed in Nigeria?
Yes. Interest on a bank fixed or term deposit suffers withholding tax at 10%, deducted by the bank. For individuals this is generally the final tax on the interest. This calculator compounds the deposit to maturity, then subtracts the 10% WHT from the interest so you see the net payout, not just the gross figure the bank advertises.
How does compounding affect the maturity value of a Nigerian fixed deposit?
Compounding frequency determines how often earned interest is added to the principal and begins earning interest itself. A deposit compounded monthly grows faster than one compounded at maturity on the same annual rate, because each monthly addition earns a little extra over the remaining term. The difference grows with the tenor and the rate, so for multi-year deposits or high-rate periods, compounding choice meaningfully affects the gross interest before WHT is applied.
Does the 10% withholding tax apply to my full deposit or only to the interest?
Only to the interest. Your principal is your own money returned at maturity and is not taxable. The bank calculates the gross interest earned over the tenor, deducts 10% of that interest figure as withholding tax, and credits you with the principal plus the net interest. The calculator applies this split so you can see clearly what portion the tax represents.
Should I compare fixed deposit rates before or after the withholding tax?
After tax. Banks advertise gross rates, but you keep only 90% of the interest earned. A deposit offering 20% gross pays an effective net rate of 18% after the 10% WHT. When comparing across banks or against alternative instruments such as treasury bills, always use the net figure so you are comparing like for like. This calculator shows the net maturity value to make that comparison straightforward.