How To Invest In Nigerian Banks - Investment Opportunities

How To Invest In Nigerian Banks - Learn How to Invest In Fixed Deposits, Commercial Papers, Mutual Funds and Buy Shares From Banks

A lot of people think banks are financial institutions designed to only accept a deposit, mobilise funds and make it available to their customers upon request. This is not true, apart from being a bank customer, you can also become an investor and reap returns from your investment in the bank sector, after all, you would be losing more if you keep the money for a long term in your account.

This article explores ways you can invest in Nigerian banks at a moderate risk and earn returns on your investment, which is normally credited to your bank account.

Here are windows you can explore:

  • Fixed deposits 
  • Commercial papers
  • Mutual Funds
  • Stocks
Investment in Fixed Deposit

If you are a customer who operates a savings or current account with a bank, you can take advantage of the returns on fixed deposit by transferring your idle cash balances; funds you may not need in 3-6 months. All you need to do, send a letter to your bank requesting for a certain sum of money to be transferred to a fixed deposit, duration and effective date. The minimum tenor of fixed deposit investment is usually 30 days but the maximum depends on the bank. Interest on your principal is calculated on a simple interest basis. Also, the total interest earning accumulated over the investment period is subject to a withholding tax of 10%.

Commercial Paper

Commercial papers are unsecured promissory note issued by a company to holders - such short term debts are used to finance account receivables, inventories or other short-term liabilities. You need to approach your bank to inquire about this investment and the terms of the arrangement. Usually, commercial paper is issued by banks with stable earnings or companies that have good credit history.

Mutual Funds

This is one of the best short-term investment available to bank customers in Nigeria. Most banks operate a mutual fund, a financial window that mobilises funds from interested investors and pays a guaranteed interest on a monthly, quarterly or annual banks. The interest payable to account holders are determined by NIBOR, Nigerian Inter-Bank Offer Rate - the rate bank lends to one another.


If you are looking for a higher return opportunity compared to other windows mentioned above, the stock exchange market is floor to play in. While investing in banking stocks comes with its own risk, the reward can huge when you do a thorough analysis a bank future potential compared to its present stock price.

Aside from price appreciation, you can also earn a dividend on your equity shares.

Final note

Before you invest your fund in Nigerian banks, please consult your financial adviser for more details.