Commercial banks have further lowered their interest rates on deposits. A study of the interest rates for the month of Shrawan (mid-July to mid-August) published by the Class ‘A’ banks shows the average interest rate on individual fixed deposits has decreased by 0.2 percentage points.
Out of the 20 commercial banks in the country, 14 have reduced their maximum deposit rates, while four have kept them unchanged and two have made a slight upward revision. Standard Chartered Bank Nepal Ltd offers the highest interest on deposits, while Prabhu Bank offers the lowest. Standard Chartered and Himalayan Bank are the only two banks that have raised their deposit rates for the next month. Machhapuchchhre, Global IME, NMB and Siddhartha Bank, on the other hand, have left their interest rates unchanged.
Nine commercial banks are offering individual fixed deposit rates of six percent or higher. Standard Chartered leads with the highest rate at 6.26 percent, followed by Everest Bank and NIC Asia at 6.25 percent each. Sanima Bank is offering 6.18 percent, while Machhapuchchhre, Prime Commercial, Global IME, and NMB Bank are each offering 6 percent
Similarly, ten banks are offering individual fixed deposit rates ranging between five percent and 5.9 percent. Siddhartha Bank and Kumari Bank are offering 5.75 percent and 5.61 percent, respectively. Rastriya Banijya Bank, Nabil Bank, Laxmi Sunrise, and Citizens Bank International each offer 5.5 percent. Agricultural Development Bank and Nepal Bank are providing 5.4 percent, while Nepal SBI and NIMB are offering 5.35 percent and 5.25 percent, respectively. At the lower end, Prabhu Bank offers the lowest individual fixed deposit rate at 4.25 percent, a drop of 1.85 percentage points.
This downward revision follows Nepal Rastra Bank’s decision to cut all rates within the interest rate corridor. Through the Monetary Policy for Fiscal Year 2025/26 unveiled last week, the central bank reduced the bank rate from 6.5 percent to six percent, the policy rate from 5 percent to 4.5 percent and the deposit collection rate (floor rate) from three percent to 2.75 percent.
With the floor rate coming down, banks have decreased their minimum savings interest rates accordingly. The minimum savings rate had previously stayed just above three percent as lowering the rates below the floor rate would have denied banks access to the central bank’s Standing Deposit Facility (SDF). Now, with the central bank itself reducing the floor rate, saving rates of banks have come down further.
Alongside savings interest rates, banks have also reduced interest rates on fixed deposits. The base rate of two commercial banks has already fallen below five percent. If rates drop further, loans are expected to become even cheaper.
