Commercial Banks in Ashwin Unveil Interest Rate Adjustments, PCBL Tops FD Rates, SCB Cuts Amidst Stability

Mon, Sep 18, 2023 10:08 AM on Interest Rates, Featured,

Commercial banks have recently announced their updated interest rate profiles for the month of Ashwin, set to take effect from Ashwin 01 i.e. from today.

Most commercial banks are offering an annual interest rate of approximately 5% for depositors who maintain savings accounts during Ashwin. Meanwhile, individual customers have the opportunity to earn a maximum interest rate of 11.36% per annum on fixed deposits (FDs), whereas institutions can secure an interest rate of 9.36% per annum on their fixed deposits.

It is worth noting that, SCB has chosen to reduce its rates, offering the lowest rates among all 20 commercial banks, with a 5.29% interest rate for institutional FDs and a 7.79% interest rate for individual FDs. In contrast, the standard savings rate at SCB remains at 5.9%. In a comparative analysis, Nepal SBI Bank has set its institutional FD rate at 6.2%, while the individual FD rate stands at 8.2%.

Prime Commercial Bank Limited (PCBL) boasts the highest FD rates among all commercial banks, offering an institutional FD rate of 9.36% and an individual FD rate of 11.36%. However, PCBL's regular savings account provides a yield of 6.36%- 8.36% which is again higher than that of any other commercial bank.

Furthermore, Everest Bank Limited and Himalayan Bank Limited have slightly elevated interest rates for their institutional and individual FDs, with rates of 9.05% and 11.05%, respectively. Concurrently, both banks maintain general savings rates at 6.05%. 

Similarly, in simpler terms, Nepal Rastra Bank mandates that banks cannot change their savings and fixed deposit interest rates by more than 10% compared to the rates they published in the previous month.

Meanwhile, it's essential to maintain a relatively small interest rate gap, with no more than a 5% difference between the minimum interest rate for regular savings accounts and individual fixed deposits (FDs). Similarly, when dealing with institutional FDs and individual FDs, there should be a maximum interest rate difference of 2% to ensure fairness. However, there is a provision for remittance savings and term deposits, allowing banks to offer an additional 1% interest rate over personal savings and term deposits. Furthermore, it's important to note that there are limits to the interest rates that can be offered on call accounts; banks are prohibited from offering interest rates exceeding 50% of the minimum savings interest rate. 

*Note: Remittance Savings Interest Rate isn't included in the table