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The short answer
Choose the tenor by when you will need the money first, then by rates. Short tenors (30 to 90 days) keep cash accessible and let you reinvest if rates rise, but expose you to falling rates at each renewal. Long tenors (180 to 365 days) fix a rate for longer but cost you a penalty if you need the money early. Longer is not always better paid: the CBN's June 2024 averages showed 6-month deposits paying more than 12-month ones.
Nigerian banks typically offer fixed deposits from 30 days up to a year. GTBank's page describes tenors of 30 to 180 days; Standard Chartered Nigeria offers 30 to 365 days for naira (360 for USD); Jaiz Bank's term deposit runs 30 to 360 days. The choice of tenor shapes three things: the rate, how soon you can reach your money without a penalty, and what happens if rates change while your money is locked.
The three trade-offs
1. Rate
Banks often pay more for longer commitments, but not always. The CBN's Money Market Indicators page publishes average deposit rates for 1, 3, 6 and 12 months. For June 2024, the latest month on the page when we checked in October 2026, it showed averages of 11.75% (1 month), 12.05% (3 months), 15.09% (6 months) and 13.08% (12 months). The 6-month rate was the highest. These are historic averages for illustration, not current rates; ask your bank for today's quotes by tenor and see where rates are published.
2. Liquidity
The longer the tenor, the longer your money is out of reach. Breaking early usually costs part or all of the interest; Standard Chartered Nigeria, for example, says you forfeit 20% or more. If there is a real chance you need the money before maturity, the penalty can wipe out the extra rate a longer tenor offered. See breaking a deposit early.
3. Reinvestment risk
A short tenor means renewing often, at whatever rate applies each time. If rates fall, every renewal earns less; if they rise, you benefit sooner. A long tenor fixes the rate, protecting you if rates fall and holding you back if they rise.
A worked comparison
Example only, with assumed rates, 365-day basis, 10% withholding tax on each interest payment. You have ₦600,000 for about a year.
| Strategy | Assumption | Balance after about a year |
|---|---|---|
| One 365-day deposit | 14% fixed | ₦675,600.00 |
| Four 90-day deposits, rolled with interest | 12% each time | ₦666,510.95 (after 360 days) |
| Four 90-day deposits, rolled with interest | 12%, 11%, 10%, 9% (rates falling) | ₦657,900.73 (after 360 days) |
On these assumptions, the one-year deposit wins, and by more when rates fall. If rates had risen instead, the 90-day route could have caught up. The 90-day route also returns your money every quarter without a penalty, which has value the table does not show. BusinessDay reported in February 2026 that the 10% withholding tax is deducted from interest and is final for individuals; see withholding tax on interest.
How to read the table
The comparison above isolates one variable at a time, so it helps to be clear about what drives each line. The one-year deposit is taxed once, on ₦84,000 of gross interest, leaving ₦75,600. The 90-day route is taxed four times, but because each cycle's net interest is added to the next, a little compounding happens along the way. What decides the outcome is mostly the rate gap between the two tenors and the direction rates move over the year. A 2-point gap in favour of the long tenor, as assumed here, is hard for the short route to overcome unless rates rise sharply. A gap the other way, as in the CBN's June 2024 averages between 6 and 12 months, can make the shorter tenor the better choice on yield as well as access.
Note also that four 90-day terms cover 360 days, not 365, so the short route leaves five days uninvested or in a savings account. Over a large sum, those days matter at the margin.
When a 30-day tenor makes sense
A 30-day deposit rarely pays the best rate, but it can be the right tool. A business that receives a large payment ahead of a supplier bill can earn something for a month instead of leaving it idle. A saver who has just received a lump sum can park it for 30 days while deciding on a longer plan, with no penalty to unwind. And when rates are rising quickly, short terms let you reprice each month. The cost is effort: every renewal is a decision, and an unattended auto-rollover may renew at a rate you would not have chosen. See rollover at maturity.
Matching tenor to purpose
| Tenor | Often suits |
|---|---|
| 30 days | Business cash between payments; money you are parking while deciding |
| 90 days | A known bill in a few months; quarterly reviews of savings |
| 180 days | School fees or rent due in six months; a mid-length goal |
| 365 days | Money you are confident you will not need for a year |
If you cannot match one date, split the money across several tenors; see fixed deposit laddering.
What to check first
- The date you might first need any of the money.
- The bank's rate for each tenor, in writing, on the same day.
- The day-count basis and exact maturity date, including weekends.
- The early-liquidation penalty.
- What happens at maturity if you do nothing.
Where Pryme fits
In the Pryme app you can choose the term of a Fixed Box to match a goal, and see the current rate for that term before you commit. A Flexible Box keeps money you might need sooner within reach. See Savings Boxes.
Questions people ask
Which is better, 90 days or 1 year fixed deposit?
It depends on when you need the money and where rates are heading. One year fixes the rate and often pays more; 90 days gives access and lets you catch rising rates. Compare after-tax figures for both.
What is the minimum tenor for a fixed deposit in Nigeria?
Many banks start at 30 days. GTBank, Standard Chartered Nigeria, Sterling and Jaiz all list 30 days as the shortest tenor on their pages.
Do longer fixed deposits always pay higher rates?
No. The CBN's averages for June 2024 showed 6-month deposits paying more than 12-month ones. Ask for quotes by tenor.
Can I change the tenor of my fixed deposit after booking?
Usually not without breaking it. You can choose a different tenor at maturity when it rolls over or when you re-place it.
Sources
- Central Bank of Nigeria: Money Market Indicators (in percentage) · accessed Oct 2026
- GTBank: Fixed and Tenored Deposits (undated product page) · accessed Oct 2026
- Standard Chartered Nigeria: Fixed Deposit Account (undated product page) · accessed Oct 2026
- Jaiz Bank: Personal Banking · accessed Oct 2026
- Sterling Bank: Investment Accounts (modified 1 Apr 2026) · accessed Oct 2026
- BusinessDay: Why was withholding tax deducted from savings interest (21 Feb 2026) · accessed Oct 2026
This article is general information, not financial, legal or tax advice. Products described are provided under the terms on this site and are subject to regulation and eligibility.