Introduction
Interest rates in Nepal shape how individuals and businesses save, invest, and borrow money. Whether you’re opening a savings account, investing in a fixed deposit, or applying for a loan, understanding the difference between commercial bank interest rates and development bank interest rates is essential for making sound financial decisions.
In Nepal, commercial banks as well as development banks are supervised by the Nepal Rastra Bank (NRB). Although the fundamental activities—accepting deposits and providing loans are the same, their interest rate structures generally differ. Commercial banks are likely to have greater services and stability, while development banks are likely to have higher deposit rates and operate in rural or semi-urban areas.
In this blog, we will compare the interest rates in Nepal offered by development and commercial banks, study their advantages and disadvantages, and help you choose the best one based on your needs.
Understanding Bank Types in Nepal – Commercial Bank Interest Rates Nepal
What is a Commercial Bank?
Commercial banks in Nepal are licensed “Class A” financial institutions offering a wide range of services including savings accounts, fixed deposits, loans, remittances, credit cards, and foreign exchange. Examples include Nabil Bank, Global IME Bank, and NIC Asia Bank.
According to NRB guidelines (NRB, 2025), commercial banks must maintain higher paid-up capital requirements than other institutions, making them more financially stable
What is a Development Bank?
A development bank in Nepal is categorized as a “Class B” financial institution. These banks primarily focus on promoting economic development through targeted lending often in agriculture, small businesses, and rural infrastructure. Examples include Mahalaxmi Bikas Bank, Garima Bikas Bank Agriculture, Green Development Bank Ltd and Shangri-La Development Bank.
They tend to offer better savings and fixed deposit interest rates than commercial banks but interest rate in nepal for loan may charge slightly higher.
Regulatory Role of Nepal Rastra Bank
The Nepal Rastra Bank sets monetary policy, determines base rates, and issues guidelines influencing both deposit and lending rates. For example, in 2025, NRB instructed banks to adjust deposit rates in line with liquidity conditions (Source: Nepal Rastra Bank).
Interest rate of commercial bank in Nepal – Fixed Deposit Rates Nepal
As of August 2025, average rates from major commercial banks are:
- Savings Account Interest: 3.0% – 4.5% per annum
- Fixed Deposit Interest: 6.0% – 8.5% per annum
- Loan Interest Rates: 10% – 14% per annum
(Source: compiled from Nabil Bank, NIC Asia Bank, and Global IME Bank rate sheets, August 2025)
While commercial bank rates are moderate, they offer better service quality, advanced online banking, and larger branch/ATM networks.
Interest rate of development bank in Nepal – Savings Account Interest Nepal
As of August 2025, average rates from major development banks are:
- Savings Account Interest: 3.5% – 5.0% per annum
- Fixed Deposit Interest: 7.0% – 9.5% per annum
- Loan Interest Rates: 11% – 15% per annum
(Source: compiled from Garima Bikas Bank, Mahalaxmi Bikas Bank, and Shangri-La Development Bank rate sheets, August 2025)
Development banks attract depositors with higher rates but may have fewer branches and less-developed online platforms.
Key Differences Between Commercial and Development Banks – Bank Interest Rate Comparison Nepal
| Feature | Commercial Banks | Development Banks |
|---|---|---|
| Regulation Class | Class A | Class B |
| Deposit Rates | Moderate | Higher |
| Loan Rates | Lower | Slightly higher |
| Branch Network | Extensive nationwide | Limited, regional focus |
| Services Offered | Wide range | Limited but targeted |
| Technology & Digital | Advanced | Basic to moderate |
| Safety & Stability | Very high | High but slightly less |
Which Bank Type Offers Better Rates in 2025? – Best Bank Interest Rates Nepal
The answer depends on your needs:
- For higher returns on savings/fixed deposits: Development banks generally offer better rates.
- For lower loan interest rates: Commercial banks are usually more favorable.
- For stability and service variety, Commercial banks take the lead.
Interest rates can change frequently due to NRB policies, inflation, and liquidity conditions, so always check the latest rates before making a decision.
Conclusion
Choosing between a commercial bank and a development bank in Nepal comes down to your priorities. If you value stability, wide service variety, and lower loan rates, a commercial bank is the way to go. If you want better returns on deposits and don’t mind slightly higher loan rates, a development bank could be a better fit.
For Latest interest rate comparisons and detailed analysis, visit Bank Rate Nepal your trusted source for banking information in Nepal.