What is a savings account?
A savings account is a bank account that earns interest on your deposited fund.
It is a convenient and secure way to store your savings as well as a way to build a healthy money-saving habit.
Did you know that deposits up to Rs 300,000 held in a savings account with commercial banks and financial institutions licensed by Nepal Rastra Bank is guaranteed by the Deposit and Credit Guarantee Fund?
Our Savings Account Interest Rate table shows the best interest rate currently on offer by the 27 commercial banks in Nepal. The interest rates are updated on a monthly basis.
Effective From November 17, 2021 (Mangsir 01, 2078).
What are the features of a savings account?
Most savings account in Nepal come with features such as:
- Debit card
- Access to ATMs, SMS banking, online and mobile banking, merchant banking etc.
- Electronic statements
- Unlimited deposit and withdrawal facility
Some banks offer free chequebooks and free statements, however, if you require a debit card or mobile and internet banking services then they’ll charge you a fee.
What are the different types of savings account available in Nepal?
The interest rate that you get depends on the type of savings account you have. Although there are dozens of different savings account, they can be categorised into a few classes.
Normal (Bachat Khata) savings account
A Normal (Bachat Khata) savings account usually has the lowest interest rate.
On the plus side, it also doesn’t require you to maintain a minimum balance.
Salary (Talab Bachat Khata) savings account
These salary savings account usually have a higher interest rate compared toother saving account types.
These also don’t require you to maintain a minimum deposit.
However, an individual cannot open this account himself, only a business can open one to pay its employees.
Premium savings account
A premium savings account has a better interest rate than the normal account but usually comes with a minimum balance requirement.
The minimum balance can vary anywhere between a few thousand rupees to a few Lakhs depending on the account and the bank.
With a premium savings account, the bank may also offer discounts on their service charges.
Women’s (Nari Bachat Khata) savings account
A women’s savings account or Nari Bachat Khata is a savings account available only to all women.
These savings account usually have a higher interest rate than the normal savings account and the minimum balance requirement is lower, making them a smart choice for all Nepali women.
Some common savings account fees in Nepal
There are a few fee-free savings account but not all of them are free.
Most banks will charge a fee for an ATM debit card, internet and mobile banking that is tied to your savings account.
You should try to avoid as many fees as possible. Fees tend to add up over a period of time.
Fees to look out for:
- Account opening fees
- Account maintenance fees/Annual fees
- Fee for chequebooks
- Fee for account statements
- Fees to close accounts
How much should you have in your savings account?
Financial experts recommend that you should have enough funds in your savings account to cover at least 6 to 12 months of your living expenses.
Basically, if your monthly living expenses is Rs 25,000, then you should have around Rs 150,000 as emergency savings (six months).
Everything else should be put where they can earn a good return, i.e. fixed deposit accounts or investments.
Tips on savings account
- Shop around for a better interest rate on your savings account.
- Look for an account without too many fees.
- Put additional funds into a high interest fixed deposit account.
Some banks offer great interest rates on their savings accounts for the first year after which your interest rate is dropped to a lower rate.
Generally, they’ll entice you with additional features such as a free debit card, no fee for mobile banking etc. for the first year.
It can be a good offer if you know how to take advantage of it. But most of us rarely change our account because of fees and interest rate.
I recently had my interest rate dropped from 6.5% p.a. to 2.5% p.a. after the first year, and then to 1.5% p.a. without even realising it. I also paid an annual fee for the extra features after the first year.
I’ve now moved my emergency fund to a high-interest savings account.
Interestingly, the Nepal Rastra Bank (NRB) recently announced a new provision for banks and financial institutions which is likely to increase interest rates on savings account.
Do you have any tips on savings account?
Feel free to leave your thoughts or comments below.