FD calculator Nepal: what a fixed deposit pays after the 6% tax

How the calculator works out a fixed deposit

Interest for each period is the yearly rate ÷ 12 × the months in the period, on the balance at its start. Nepali banks pay FD interest quarterly unless the product says otherwise: ADBL's and Global IME's FD pages say so, as do RBB's and Himalayan Bank's notices. Citizens Bank offers monthly interest; Laxmi Sunrise pays at maturity or quarterly, depending on the term.

When the interest is added to the FD (a cumulative FD, such as Kumari's Fixed Deposit Plus or Nabil's Cumulative FD), each quarter's interest, less its tax, joins the deposit and earns interest from then on. Rs 1,00,000 at 2.85% for a year that way grows to Rs 1,02,706.04. Paid out each quarter instead, it brings Rs 2,679.00 in all, and the deposit stays at Rs 1,00,000.

Banks count interest by the day on a 365-day year, and none states its exact day count, so a bank's own figure can differ from this one by a few rupees.

What a fixed deposit pays now, Kartik 2083

A one-year FD at the 20 commercial banks pays between 2.75% and 3.20% a year for an individual, 2.85% on average. Each bank's top rate, 3.40% to 4.50%, needs a long term: 13 of the 20 pay it only from 5 years or more, and 3 only beyond 10. Rates from 1 Kartik 2083 (18 Oct 2026).

The highest top rate, 4.50%, is at Machhapuchchhre, NMB and Sanima. Rs 1,00,000 for five years at the average top rate, 4%, added each quarter, becomes Rs 1,20,577.46 after tax.

• Machhapuchchhre Bank: 4.50% for 3 years and above; 3.00% for one year (6 months to 3 years).
• NMB Bank: 4.50% for 5 years and above; 2.75% for one year (3 months to 3 years).
• Sanima Bank: 4.50% for above 5 years; 2.80% for one year (3 months to 1 year).
• Prabhu Bank: 4.25% for above 10 years; 2.75% for one year (6 months to 1 year).
• Agricultural Development Bank: 4.15% for 4 years and above; 2.75% for one year (3 months to 1 year).
• Nepal Bank: 4.15% for above 10 years; 2.76% for one year (3 months to 1 year).
• Global IME Bank: 4.00% for 5 years and above; 2.76% for one year (3 months to 1 year).
• Himalayan Bank: 4.00% for 5 to 10 years; 3.00% for one year (1 to 2 years).

The 6% tax on FD interest

The bank deducts 6% of the interest at each credit and pays it to the Inland Revenue Department. For an individual this is a final withholding: nothing more is owed, and the interest is not added to your income for tax (Income Tax Act 2058, sections 88(3) and 92). The rate was 5% before the 2080/81 budget.

On Rs 1,00,000 at 2.85% for a year, the tax is Rs 172.72, so 2.85% works out to about 2.71% a year after tax.

Quarterly compounding, and the rate you really get

Interest added every quarter earns interest of its own, so a quoted rate compounds to slightly more over a year: 4% becomes 4.06% before tax. Monthly compounding adds a little more; yearly, less. The difference is small at today's rates, which is why the term and the rate matter far more than how often interest is added.

For a monthly income, interest paid out each month is what matters. Rs 10 lakh at 4.50% brings Rs 3,525.00 a month after tax.

Breaking a fixed deposit early

Most banks let an individual break an FD, but pay less interest for it, and few publish the rule. The rules three banks publish:

• Everest Bank: the rate for the period actually held (the lower of the rate at issue or at withdrawal), less 3 percentage points, with 15 days' notice.
• Siddhartha Bank: no interest within 3 months; after that, the lower of the coupon or the published rate for the period held, less 2% a year.
• Kumari Bank: the lowest savings rate from the FD's opening date, and a flat Rs 10.
• Institutional FDs cannot be broken in the first 6 months, by NRB's directive as banks state it. How a bank takes back interest it has already paid out is not published; ask the bank before you sign.

Inflation: what the interest is worth

The calculator shows the end value in today's money at 5.5%, NRB's inflation projection for 2083/84. At today's rates a one-year FD pays less than that after tax, so money in it buys a little less each year. That is the trade an FD makes: no fall in the rupee amount, at a rate that may not keep up with prices.

To compare an FD with a SIP, use the SIP calculator, which sets the same money in an FD after tax beside it. Every bank's rate, the rules and the history are in the fixed deposit guide.

Is a fixed deposit safe?

Deposits of up to Rs 5,00,000 per person at each bank or financial institution, savings and fixed deposits together, are guaranteed by the Deposit and Credit Guarantee Fund, which banks pay a premium to. Money above that at one bank is not guaranteed. Deposits at cooperatives are not covered.