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The short answer
A monthly-interest fixed deposit pays the interest earned each month into your account instead of holding it until maturity; the annual rate and total interest are the same on a simple-interest deal, but you get cash earlier. Jaiz Bank, for example, says its term deposit pays profit monthly, while Sterling says its fixed deposit pays at maturity, so ask your bank which options it offers.
Retirees, landlords waiting for rent and anyone living partly off savings often want income every month rather than a lump sum at the end. Some Nigerian deposit products are set up that way. This article explains the mechanics, shows what monthly payment does and does not change, and lists what to ask before you choose it.
How monthly payout works
You place a sum for a fixed tenor at an agreed annual rate. Each month the bank calculates that month's interest, deducts withholding tax and credits the net amount to a linked account. The principal stays locked until maturity, when it is returned or rolled over. Nothing about the rate changes; only the timing of the interest does.
What banks' own pages say
- Jaiz Bank describes its Jaiz Term Deposit as a Mudarabah product with an opening amount of ₦500,000, tenors of 30 to 360 days and profit paid monthly at a pre-agreed profit-sharing ratio. It is profit-sharing, not fixed interest, so the amount can vary.
- Sterling Bank says its fixed deposit has a minimum tenor of 30 days, a negotiable rate and interest paid at maturity.
- Access Bank's 1 Year Fixed Rate Deposit form shows an interest payment option labelled "Back End Quarterly", while its terms say interest is paid at maturity, so confirm the schedule with the bank.
Many banks will discuss payment options on request even when their pages do not list them. Ask before you sign, and make sure the deal slip states the payment frequency.
Does monthly interest earn more or less?
On a simple-interest deposit, the total interest is the same either way. What differs is what you can do with the money in between.
Worked example (illustrative rate): ₦3,000,000 for 12 months at 18% a year, with 10% WHT.
| Interest at maturity | Interest monthly | |
|---|---|---|
| Gross interest | ₦540,000 at the end | ₦45,000 each month |
| WHT at 10% | ₦54,000 | ₦4,500 each month |
| Net received | ₦486,000 at the end | ₦40,500 each month, ₦486,000 in total |
| Net yield if you spend the monthly income | 16.2% | 16.2% |
| Net yield if each payment earns the same rate | 16.2% | about 17.5% |
The last row assumes each monthly ₦40,500 is put straight back to work at the same net rate of 1.35% a month, which compounds to about 17.5% over the year. In practice you would earn whatever your current account or savings pot pays on it, which may be much less. So monthly payout helps your cash flow; it only helps your return if you reinvest the payments well.
The other side
- Some banks may quote a slightly lower rate for monthly payout than for maturity payout because they part with cash sooner. Compare the quotes.
- If you break the deposit early, interest already paid to you may be clawed back from the principal. Ask how the bank treats it.
- Profit-sharing products like Jaiz's pay a share of actual profit, so monthly amounts can differ from month to month.
Who it suits
Monthly payout makes sense when the interest is a planned part of monthly income: a retiree topping up a pension, or a parent covering a fixed monthly cost. It makes less sense when you are saving for a goal and would simply leave the payments sitting idle; then interest at maturity, or rolling the interest into the next term, keeps the money working. Our guide to how fixed deposit interest is calculated shows the arithmetic, and upfront interest vs interest at maturity covers the other timing option.
Keeping track of monthly payments
Twelve small credits are easier to lose track of than one large one. Check each payment against the expected net amount: on the example above, ₦40,500. If a month arrives short, the usual causes are a different day count for that month or a rate change that was not agreed. Keep the bank's interest advices, because they show the WHT deducted each month, and you may need that record for your own tax position; see withholding tax on interest. If the monthly interest is meant to cover a fixed bill, set the bill's due date a few days after the expected credit, not on the same day.
What to check first
- Is monthly payout available on your amount and tenor, and is the rate the same as for maturity payout?
- Which account do the payments go to, and on which day of the month?
- What happens to interest already paid if you break the deposit early?
- Is the product fixed interest or profit-sharing?
Where Pryme fits
If you take monthly interest from a bank deposit, you can move it into a Flexible Box in the Pryme app so it is kept apart from spending money and earns at the rate shown in the app; Boxes are naira only. Your Personal Assistant can prepare a reminder or a regular move, and nothing moves without your approval. See Savings Boxes.
Questions people ask
Which banks pay fixed deposit interest monthly in Nigeria?
Jaiz Bank says its term deposit pays profit monthly. Sterling says its fixed deposit pays at maturity, and Access Bank's form lists a quarterly option. Many banks discuss options on request, so ask yours.
Is monthly interest better than interest at maturity?
On a simple-interest deposit the total is the same. Monthly payout only gives a higher return if you reinvest each payment at a decent rate.
Is withholding tax deducted from monthly interest?
Yes, WHT is deducted from each interest payment before it reaches you, so each monthly credit is net.
Can I get monthly interest on ₦1 million fixed deposit?
It depends on the bank's minimum and options. Jaiz's term deposit, for example, opens from ₦500,000. Ask the bank whether monthly payout applies at your amount.
Sources
- Jaiz Bank: Personal banking · accessed Oct 2026
- Sterling Bank: Investment accounts (page modified 1 Apr 2026) · accessed Oct 2026
- Access Bank: 1 Year Fixed Rate Deposit application form (PDF) · accessed Oct 2026
- Kuda Help: Save money (savings rates and withholding tax, updated Aug 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.