Fixed deposits (FDs) use simple interest — not compound interest — which makes them easy to calculate. Here's the formula and worked examples.

The Formula

Gross Interest = Principal × (Rate / 100) × (Days / 365)

Worked Example 1 — 90-Day FD at GCB Bank

  • Principal: GHS 10,000
  • Rate: 21.5% p.a. (GCB 90-day rate)
  • Tenure: 90 days
Gross Interest = 10,000 × 0.215 × (90/365) = GHS 529.45
Withholding Tax (8%) = GHS 42.36
Net Interest = GHS 487.09
Maturity Value = GHS 10,487.09

Worked Example 2 — 1-Year FD at GCB Bank

  • Principal: GHS 10,000
  • Rate: 24.0% p.a.
  • Tenure: 365 days
Gross Interest = 10,000 × 0.24 × (365/365) = GHS 2,400
Withholding Tax (8%) = GHS 192
Net Interest = GHS 2,208
Maturity Value = GHS 12,208

Withholding Tax on FDs

The bank deducts 8% withholding tax on your gross interest at maturity before paying you. This is a final tax — you don't need to report it separately. The bank remits the tax directly to GRA on your behalf.

Real Return vs. Nominal Return

Your real return is your net interest rate minus inflation. With Ghana's recent inflation rates, it's important to choose FD rates that at minimum match inflation to avoid losing purchasing power in real terms.

  • FD Rate: 24.0% gross → 22.1% net (after 8% WHT)
  • If inflation is 18%: Real return ≈ +4.1%
  • If inflation is 24%: Real return ≈ -1.9% (you're losing in real terms)

When to Prefer Longer Tenures

Longer tenures (180 days, 1 year) lock in higher rates. This is advantageous when you expect Bank of Ghana to cut the policy rate — your FD rate stays fixed while market rates fall. Conversely, if you expect rates to rise, stick to shorter tenures (30–60 days) and roll over at the new higher rate.