Investing in a Fixed Deposit (FD) account with NCBA is a secure way to grow your savings with guaranteed returns. Unlike a standard savings account where interest rates may fluctuate or remain low, a fixed deposit locks in a specific interest rate for the duration of your chosen tenure. This NCBA Fixed Deposit Rates Calculator helps you estimate your potential earnings by factoring in the principal amount, the duration of investment, and the applicable withholding tax.
How Fixed Deposit Interest is Calculated
The interest on a fixed deposit is generally calculated using the simple interest formula for short-term deposits (less than one year) or deposits where interest is paid out at maturity. The formula used in this calculator is:
Interest = (Principal × Rate × Time) / 100
Principal: The initial amount of money you deposit (e.g., KES 100,000).
Rate: The annual percentage rate provided by the bank (e.g., 9% p.a.).
Time: The duration of the deposit, typically expressed as a fraction of a year (e.g., 6 months = 0.5 years).
Withholding Tax on Fixed Deposits
In many jurisdictions where NCBA operates, including Kenya, interest income earned from fixed deposits is subject to Withholding Tax (WHT).
For instance, in Kenya, the standard WHT rate is 15%. This tax is deducted at the source by the bank before the interest is paid to you. This means your Net Interest (what you actually receive) will be lower than the Gross Interest calculated.
Example Calculation
Let's say you invest KES 500,000 for a period of 12 months at an interest rate of 10% p.a.
Metric
Calculation
Amount
Gross Interest
500,000 × 10% × 1 Year
KES 50,000
Withholding Tax (15%)
50,000 × 15%
KES 7,500
Net Interest
50,000 – 7,500
KES 42,500
Total Maturity
Principal + Net Interest
KES 542,500
Factors Affecting Your Rate
The specific rate you are offered by NCBA may vary based on several factors:
Deposit Amount: Higher principal amounts often attract higher interest tiers.
Tenure: Longer investment periods (e.g., 12 months vs. 3 months) typically yield higher rates.
Market Conditions: Central Bank lending rates and general economic conditions influence bank deposit rates.
Account Type: Business and corporate accounts might negotiate different rates compared to personal retail accounts.
Disclaimer: This calculator is for estimation purposes only. Actual rates are subject to change by NCBA Bank and should be confirmed directly at a branch or via the official banking app.
function calculateFixedDeposit() {
// 1. Get Input Values
var principal = parseFloat(document.getElementById('depositAmount').value);
var months = parseFloat(document.getElementById('investmentTenure').value);
var rate = parseFloat(document.getElementById('interestRate').value);
var taxRate = parseFloat(document.getElementById('taxRate').value);
// 2. Validate Inputs
if (isNaN(principal) || principal <= 0) {
alert("Please enter a valid Deposit Amount.");
return;
}
if (isNaN(months) || months <= 0) {
alert("Please enter a valid Tenure in months.");
return;
}
if (isNaN(rate) || rate < 0) {
alert("Please enter a valid Interest Rate.");
return;
}
if (isNaN(taxRate) || taxRate < 0) {
taxRate = 0; // Default to 0 if invalid, though HTML sets default to 15
}
// 3. Calculation Logic
// Convert months to years for the annual rate calculation
var timeInYears = months / 12;
// Calculate Gross Interest: P * R * T / 100
var grossInterest = (principal * rate * timeInYears) / 100;
// Calculate Withholding Tax
var taxAmount = (grossInterest * taxRate) / 100;
// Calculate Net Interest
var netInterest = grossInterest – taxAmount;
// Calculate Total Maturity Amount
var maturityAmount = principal + netInterest;
// 4. Format Output (Currency formatting)
var formatter = new Intl.NumberFormat('en-KE', {
style: 'currency',
currency: 'KES',
minimumFractionDigits: 2
});
// 5. Display Results
document.getElementById('grossInterest').innerHTML = formatter.format(grossInterest);
document.getElementById('taxDeducted').innerHTML = formatter.format(taxAmount);
document.getElementById('netInterest').innerHTML = formatter.format(netInterest);
document.getElementById('maturityAmount').innerHTML = formatter.format(maturityAmount);
// Show the result box
document.getElementById('results').style.display = 'block';
}