KSh 500,000 in a fixed deposit at 9.00% for 12 months earns KSh 38,250 after tax.
Fixed deposits versus other safe options
A fixed deposit locks your money with a bank for an agreed term at a set rate. Interest is taxed at 15%, the same as Treasury bills and money market funds. Fixed deposits only make sense when the bank’s rate beats the latest T-bill rate for a similar period, because T-bills are backed by the government and can be bought from KSh 50,000.
Rates used in this calculator
Withholding tax on investment interest
Money market funds
15% WHT on interest
Treasury bills
15% WHT on the discount
Treasury bonds under 10 years
15% WHT
Treasury bonds of 10+ years
10% WHT
Infrastructure bonds
Tax-free
Bank fixed deposits
15% WHT
Frequently asked questions
Is fixed deposit interest taxed in Kenya?
Yes. Banks deduct 15% withholding tax from the interest before paying it.
Can I withdraw a fixed deposit early?
Usually yes, but banks charge a penalty or pay a lower rate. Check the terms before you lock in.