How to Read Any Nepali Bank FD Rate Card in Five Minutes

You walk into a branch or open a bank's website and there it is: a rate card with neat rows for one, three and five years. What the card doesn't always spell out is that the same bank often prints two different rates for the same tenor, one if you take interest monthly and another if you let it compound to maturity. The monthly-payout rate is the lower of the two, because the interest leaves the deposit instead of staying inside to earn more interest. Here's how to read that card line by line, what's worth comparing across banks, and what you will never find on a public notice board.

What the table shows and what it doesn't

The rates below are example figures, built to match the way rate cards are typically laid out at Class A commercial banks. They are not live quotes, and they are attached to placeholder bank names on purpose. A real card changes without notice, and today's rate can be next month's. Always confirm the present rate, payout options, minimum deposit, tax deduction and insurance cover with the bank before you deposit.

Note: regulatory class reflects Nepal Rastra Bank licensing categories (Class A commercial banks, Class B development banks, Class C finance companies, Class D microfinance). It is descriptive only, not a safety, risk or returns assessment.

Why the same bank quotes two rates for the same tenor

Take the three-year row for Bank A. The card prints 9.00% for that tenor, but only if you take interest at maturity. Choose a monthly payout and the printed rate falls, usually by a few tens of basis points, because interest credited to your savings account each month no longer sits in the deposit earning interest of its own. With the at-maturity option the interest compounds inside the deposit, so what you actually earn over three years is more than the nominal 9.00%. Cards quote a nominal rate for each payout basis. They do not quote effective yield, and that gap is where most people misjudge what they'll get.

Worked example: what 9% actually pays over three years

Using the example three-year at-maturity rate of 9.00% from the table, and assuming quarterly compounding, which is common but not universal. Check your own bank's stated compounding frequency.

Step 1: Nominal annual rate r = 9.00% = 0.09. Quarterly rate = r/4 = 0.0225.
Step 2: Quarters in three years = 3 × 4 = 12.
Step 3: Growth factor per quarter = 1 + 0.0225 = 1.0225.
Step 4: Total growth factor = 1.0225^12 ≈ 1.30605.
Step 5: Effective annual yield = (1.30605)^(1/3) − 1 ≈ 0.0931, or 9.31%.
Step 6: On NPR 100,000, maturity value ≈ NPR 130,605; interest earned ≈ NPR 30,605.

This is arithmetic based on an example card rate, not a bank-quoted figure.

Corporate and institutional rates never make it onto the card

Notice that the institutional column above reads ‘negotiated’ instead of a number. That is how it works in practice. Banks price corporate fixed deposits on relationship, volume, tenor and the rest of the depositor's business with the bank, which makes a like-for-like individual-versus-institutional comparison impossible to print.

Tax is deducted before the interest reaches you

Interest on fixed deposits is subject to withholding tax at source, and the bank takes it out before crediting you. The rates are set afresh each year by the annual Finance Act, so whatever applied two years ago is not necessarily what applies today. For fiscal year 2081/82 (2024/25), for instance, withholding was 5% for individuals and 15% for institutions. Ask the branch, or check the Inland Revenue Department, for the rate under the Finance Act now in force for fiscal year 2083/84 before you commit your money.

Deposit insurance: know the ceiling

Deposits at licensed banks and financial institutions are protected by the Deposit and Credit Guarantee Fund (DCGF) up to a ceiling per depositor per institution. That ceiling was raised to NPR 500,000 in 2022. Whether it still stands at that level in 2026 is worth checking directly, and the DCGF website or a two-minute question at the counter will settle it. If you're placing a large lump sum with one institution, that ceiling is the number that matters most.

Why rates across banks sit so close together

Nepal Rastra Bank does not leave deposit pricing entirely to the market. Its unified directives have, at various points, capped the interest a commercial bank may pay on individual term deposits, often by tying the maximum to the bank's own base rate plus a permitted spread. When a cap like that is in force, published card rates bunch up, because no bank can go above the line. The exact formula and the current ceiling change with each directive revision, so read the unified directive in force on nrb.org.np rather than relying on an older summary. Including this one.

The number the central bank publishes every month

Nepal Rastra Bank publishes a weighted average deposit rate in its monthly bulletins and monetary policy updates. It's an average across all licensed institutions, weighted by deposit volume, so no single bank offers it. As a quick read on which way deposit rates are moving, it's the most reliable public signal there is. Find it under Publications on nrb.org.np.

Before you sign

Everything above uses illustrative example rates, not quotes from any bank on any date. Rates, payout options, minimum deposits, tax treatment, insurance limits and compounding frequency all change, sometimes quietly. Confirm each of them with the bank in writing before you deposit. This article is informational and is not investment advice.