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The short answer
Nigerian banks deduct 10% withholding tax from interest before paying it, and since 1 January 2026 that includes interest on foreign-currency (domiciliary) deposits. The tax authority also directed 10% withholding on interest from short-term securities such as Treasury bills from late 2025, while FGN bond interest stays exempt. For individuals the 10% is reported as a final tax on savings interest, but if you live abroad your home country will usually tax the interest too and credit the Nigerian 10%.
Fixed deposits, savings accounts, domiciliary accounts and Treasury bills are the usual places diaspora money sits in Nigeria. The interest arrives net of tax, which leaves two questions: is 10% all Nigeria takes, and what happens where you live?
The rate
PwC's Nigeria withholding tax table (reviewed 29 May 2026) shows 10% on interest for resident and non-resident individuals alike. The bank or other payer deducts it at source and pays it to the tax authority. In practice you see it on your statement as a line below the gross interest.
What changed for diaspora savers
Domiciliary account interest
BusinessDay reported on 1 January 2026 that banks would deduct 10% withholding tax on all foreign-currency deposit interest from that day, citing an Access Bank notice that described the change as "aligning with the Nigeria Tax Act, 2025". If you hold dollars or pounds in a Nigerian dom account, expect interest to arrive net of 10%.
Treasury bills and other short-term securities
KPMG reported in December 2025 that the tax authority directed financial institutions to deduct withholding tax on interest from short-term securities, such as Treasury bills, promissory notes, corporate bonds and bills of exchange, on the payment date. A Mondaq analysis (November 2025) puts the rate at 10%. KPMG notes that interest on Federal Government bonds remains exempt. If you buy T-bills from abroad, the discount income is no longer tax-free; our guide to T-bill maturity proceeds covers the money side, and FGN bond coupons the exempt alternative.
| Where the interest comes from | Nigerian withholding (as at Oct 2026) |
|---|---|
| Naira savings or fixed deposit | 10% |
| Domiciliary (foreign-currency) deposit | 10% from 1 January 2026 |
| Treasury bills and other short-term securities | 10%, per the late-2025 directive |
| FGN bonds | Exempt |
Fintech savings and digital banks
The same rule reaches app-based savings. BusinessDay's February 2026 explainer says the 10% applies to interest on fintech savings products as well as bank deposits, and that banks enforced it on January 2026 statements. If an app advertises a headline rate, assume it is the gross figure before the 10%, unless the app says otherwise.
One practical consequence for people abroad: the net figure that lands in your account is not the number your home tax office wants. Most returns ask for gross interest and the foreign tax separately, so keep the breakdown, not just the total received.
Is 10% final?
For individual savers, BusinessDay (21 February 2026) quoted Forvis Mazars describing the 10% on interest as a final tax. For non-residents, a September 2026 Mondaq article by Helen Ijewere of Nolands says non-resident individuals whose Nigerian income is only passive pay only the withholding tax. Nigeria taxes a non-resident only on income derived from Nigeria, so a non-resident with only bank interest normally has nothing further to file in Nigeria. If you are still Nigerian resident under the wide residence tests, the position differs; see dual residence.
Can a treaty lower it?
Rarely in practice. PwC lists treaty rates of 7.5% for China, Singapore, South Africa, Spain and Sweden; for the UK, Canada and other treaty countries the effective rate is 10%, the same as the domestic rate. Where a lower treaty rate exists, the reduced rate has to be claimed in advance through the tax authority; for a small deposit the paperwork is rarely worth it.
Where you live
Most countries tax their residents on worldwide interest. You usually declare the gross interest, converted to your home currency, and claim the Nigerian 10% as a foreign tax credit, capped at your home tax on that interest. Without a treaty, the method may differ; see relief without a treaty.
Worked example (illustration only)
You hold ₦5,000,000 in a one-year naira fixed deposit at an example rate of 18% a year. Gross interest: ₦900,000. Withholding at 10%: ₦90,000. Net paid: ₦810,000. Abroad, you declare ₦900,000 converted to your currency, and claim ₦90,000 of Nigerian tax as a credit. If your home rate on that interest is 20%, home tax is ₦180,000 before credit and ₦90,000 after it, in your currency.
What to check first
- Look at your statement: is the gross interest and the tax deducted shown separately?
- Ask the bank for a withholding tax receipt or annual interest certificate.
- Note the exchange rate on each payment date, or the rule your tax office uses.
- Declare the gross figure at home, not the net.
The Nigeria-side rules in more depth are in our guide to withholding tax on interest in Nigeria.
Where Pryme fits
Savings Boxes on Pryme hold naira in Nigeria; rates are shown in the app (Savings Boxes). Interest from any Nigerian provider is income you may need to declare where you live, so keep the statements. This is information, not tax advice.
Questions people ask
How much tax is deducted from interest in Nigeria?
10% withholding tax, deducted by the bank before payment, for residents and non-residents.
Is interest on my domiciliary account taxed now?
Yes. Banks began deducting 10% on foreign-currency deposit interest from 1 January 2026.
Are Treasury bills still tax-free in Nigeria?
No. The tax authority directed 10% withholding on short-term securities, including T-bills, from late 2025. FGN bond interest remains exempt.
Do I pay tax again abroad on Nigerian interest?
Usually you declare it at home and claim the Nigerian 10% as a credit, paying only any difference.
Sources
- PwC Worldwide Tax Summaries: Nigeria, corporate withholding taxes (reviewed 29 May 2026) · accessed Oct 2026
- BusinessDay: Banks will deduct 10% withholding tax on foreign currency interest from today (1 Jan 2026) · accessed Oct 2026
- BusinessDay: Why was withholding tax deducted from savings interest (21 Feb 2026) · accessed Oct 2026
- KPMG TaxNewsFlash: Nigeria guidance on withholding tax on interest from short-term securities (4 Dec 2025) · accessed Oct 2026
- Mondaq (Advocaat Law Practice): FIRS imposes 10% withholding tax on interest on short-term securities (14 Nov 2025) · accessed Oct 2026
- Mondaq (Nolands): Taxation of non-resident individuals in Nigeria (30 Sep 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.