What investment rate should I use for Nigeria?

Nigerian Treasury Bills yield 18-22% p.a. (2026). Fixed deposits offer 8-15%. Money market funds offer 18-22% with more liquidity. Savings accounts offer 4-8%. Use the rate specific to your investment product.

How does compound interest work in Nigeria?

Compound interest means you earn interest on your previous interest. Most Nigerian banks compound monthly. At 15% p.a. compounded monthly, ₦500,000 grows to about ₦895,000 in 3 years without any additional contributions.

Compound Interest Calculator

Grow your savings at Nigerian rates — T-bills, fixed deposits, money market funds.

Investment Details

Initial Investment

₦

Monthly Contribution

₦

Annual Interest Rate

% p.a.

Investment Period

Compound Frequency

Future Value

₦5,482,316

Total Deposits

₦3,500,000

Interest Earned

₦1,982,316

Growth Factor

1.57x

Year-by-Year Growth

How to Use This Calculator

Investment Growth tab

Enter your initial investment and monthly contribution. The calculator shows how your money grows over time. The default rate of 15% reflects typical Nigerian T-bill yields. Use "More options" to change the compounding frequency — most Nigerian savings products compound monthly or annually.

Savings Goal tab

Know what you're saving for? Enter the target amount and when you need it. The calculator reverse-solves your required monthly contribution. If you already have savings, enter them as "Existing savings" — this reduces how much you need to add each month.

Compare tab

Compare two investment options side by side — for example, Treasury Bills at 22% vs a fixed deposit at 10%. See exactly how much more the higher-rate option earns over your chosen time frame.

Nigerian Investment Rates (2026)

Choosing the right rate is critical for accurate projections:

Investment	Typical Rate	Notes
CBN Treasury Bills	18–22% p.a.	91-day, 182-day, 364-day
FGN Bonds	16–20% p.a.	Longer tenors, semi-annual coupon
Fixed Deposit (tier-1 banks)	8–15% p.a.	Varies by amount and tenor
Fixed Deposit (microfinance)	12–18% p.a.	Higher rates, higher risk
Money Market Funds	18–22% p.a.	Liquid, regulated by SEC
Stock Market (NGX)	Variable	Historical: 15–25% long-term average
Savings Account	4–8% p.a.	CBN minimum savings rate

Rates above reflect 2026 conditions with CBN MPR at 26.5%. Rates change — check with your financial institution for current offers.

The Formula

Compound interest grows exponentially because interest is earned on previous interest:

A = P(1 + r/n)^(nt) + PMT × [(1 + r/n)^(nt) − 1] / (r/n) Where: A = future value P = initial principal r = annual rate (decimal, e.g. 0.15 for 15%) n = compounding frequency (12 = monthly, 4 = quarterly) t = time in years PMT = monthly contribution

For the Savings Goal tab, the formula is reversed to solve for PMT — the monthly amount needed to reach your target.

Example: Building an Emergency Fund

Tobi wants to save ₦3M in 3 years

Tobi already has ₦500K saved and can invest in Treasury Bills at 20% p.a., compounded monthly.

Savings Goal tab input:

Target₦3,000,000

Existing savings₦500,000

Rate20% p.a.

Years3

Result:

Required monthly savings≈ ₦52,000

Total deposited≈ ₦2,372,000

Interest earned≈ ₦628,000

The ₦628,000 in interest means Tobi reaches the goal by only depositing ₦1,872,000 in additional contributions — the interest accounts for over 21% of the final amount.

Compare: T-Bills vs Fixed Deposit

Using the Compare tab with ₦500K initial, 3 years:

T-Bills @ 20%₦896,000 final value

Fixed deposit @ 10%₦670,000 final value

Difference₦226,000 more with T-Bills

The 10% rate difference turns into a ₦226,000 real difference over 3 years — money that stays in your pocket.

FAQ

What rate should I use for Nigerian Treasury Bills? ▼

Nigerian Treasury Bill rates change at each CBN auction, typically every two weeks. In 2025–2026, rates have ranged from 18–22% p.a. for the 364-day bill. Check the CBN website (cbn.gov.ng) or your stockbroker for the latest stop rates. For long-term projections, using 15–18% as a conservative estimate is prudent.

Are investment returns taxed in Nigeria? ▼

Yes. Under NTA 2025: interest income from bank deposits is subject to withholding tax (WHT) at 10%, typically deducted at source. Treasury Bill income is generally exempt from personal income tax for individual investors. Capital gains tax (CGT) applies at 10% on disposal of certain assets. This calculator shows pre-tax returns — adjust your rate down by approximately 10% for after-tax bank deposit returns.

How does inflation affect my savings in Nigeria? ▼

Nigeria's inflation rate is approximately 15–20% (2026). This means money loses purchasing power over time. If your investment earns 15% but inflation is 18%, your real return is negative. To estimate real returns, subtract inflation from your nominal rate: 20% T-bill rate - 16% inflation = ~4% real return. Treasury Bills have historically offered some protection against naira inflation, unlike savings accounts.

What is a money market fund and how does it compare to T-bills? ▼

Money market funds (MMFs) pool investor money to buy T-bills, government bonds, and similar instruments. They offer similar rates (18–22%), are regulated by SEC Nigeria, and are more accessible — minimum investment can be as low as ₦1,000. Unlike direct T-bill purchases (minimum ~₦50M at CBN primary auction), MMFs allow small investors to access near-T-bill rates with daily liquidity.