The average interest rates offered by banks for the month of Ashoj (mid-September to mid-October), the third month of the current fiscal year 2025/26, have declined further. Banks have been reducing interest rates in recent months as deposits in the banking system pile up and demand for credit slows.
According to the new interest rate published by commercial banks on Tuesday, the average minimum interest rate on ordinary savings accounts across the 20 commercial banks now stands at 2.75 percent, with the maximum at 3.81 percent. Similarly, the average minimum interest rate on individual fixed deposits (FDs) is 3.39 percent, while the maximum is 5.46 percent.
In the previous month, the average minimum interest rate on savings accounts was 2.76 percent and the maximum was 3.84 percent. For personal fixed deposits, the average minimum stood at 3.49 percent and the maximum at 5.59 percent.
According to the Nepal Bankers Association (NBA), all commercial banks have reduced their savings account interest rates compared to previous month. The decrease ranges from 0.002 percentage points to 0.033 percentage points. For individual fixed deposits, the decline ranges between 0.109 percentage points and 0.126 percentage points.
As a result, most banks now offer a minimum of 2.75 percent percent interest rate on ordinary savings accounts, while individual fixed deposit rates range between 2.75 percent and 5.5 percent. Nine commercial banks have lowered their interest rates on fixed deposits for Ashoj, while 10 banks have kept their rates unchanged. Standard Chartered Bank Nepal, however, bucked the trend, raising interest rate on individual fixed deposits by 0.050 percentage points to 5.18 percent.
Some banks, however, are still offering up to six percent interest on personal fixed deposits. Himalayan, Global IME, Machhapuchchhre, NIC Asia and NMB are offering six percent interest on fixed deposits. Machhapuchchhre Bank is the only commercial bank to increase its interest rates on saving accounts.
Among government-owned banks, Nepal Bank Ltd is offering up to 5.25 percent on individual fixed deposits and 3.25 percent on institutional fixed deposits. Similarly, Rastriya Banijya Bank is offering 5.5 percent and four percent, respectively, while Agricultural Development Bank has capped its interest rates on fixed deposits at 5.05 percent for individuals and three percent for institutions.
Analysts say interest rates fell also because of the Monetary Policy for 2025/26 which reduced the bank rate from 6.5 percent to six percent and the deposit collection rate from three percent to 2.75 percent.
Anil Sharma, Executive Director of the Nepal Bankers’ Association, said the continued abundance of liquidity in the banking system and the likelihood of it increasing further has pushed deposit rates steadily downward in recent months.
