📅 Baishakh 2083 Update — Rates effective Baishakh 01, 2083 (April 14, 2026). Updated monthly.
Two of the most popular savings products offered by Nepali banks are Recurring Deposits (RD) and Fixed Deposits (FD). Both are safe, NRB-regulated instruments — but they serve very different saving habits and goals. This guide helps you decide which is right for your financial situation.
What Is a Recurring Deposit (RD)?
A Recurring Deposit allows you to save a fixed amount every month for a set period — typically 6 months to 10 years. At maturity, you receive your total deposited amount plus the accumulated interest. RDs are ideal for people with a regular monthly income who want to build wealth systematically over time.
In Nepal, RD interest is compounded quarterly per NRB convention. Use our RD Calculator to see your exact maturity value.
What Is a Fixed Deposit (FD)?
A Fixed Deposit requires you to invest a lump sum for a fixed period at a fixed rate. FDs are ideal for people who already have savings accumulated and want to park them safely to earn higher interest than a regular savings account.
RD vs FD: Key Differences
| Feature | Recurring Deposit (RD) | Fixed Deposit (FD) |
|---|---|---|
| Investment type | Monthly installments | One-time lump sum |
| Minimum amount | NPR 500–1,000/month | NPR 5,000–25,000 lump sum |
| Interest rate | Slightly lower than FD | Generally higher |
| Compounding | Quarterly (NRB norm) | Quarterly or at maturity |
| Ideal for | Salaried/regular income earners | One-time savers with lump sum |
| Flexibility | Monthly commitment required | One deposit, then wait |
| Premature withdrawal | Penalty applies | Penalty applies |
Which Earns More Interest in Nepal?
FDs generally offer slightly higher interest rates than RDs because the bank has the full amount from day one. With RDs, your deposits build gradually, so the effective return is on a smaller average balance. However, because RDs instill a disciplined savings habit, they often help people accumulate more wealth in practice — especially those who might otherwise spend their monthly surplus.
When to Choose RD
- You receive a regular monthly salary and want to save a fixed amount
- You do not currently have a large lump sum to invest
- You want to build a savings habit with a fixed monthly commitment
- You are saving for a goal 1–5 years away (education, down payment, travel)
When to Choose FD
- You have received a lump sum (bonus, inheritance, maturity payout from another FD)
- You want the highest possible guaranteed return on your savings
- You will not need the money for the next 1–5 years
- You want to take a loan against the deposit if needed in future
Current RD vs FD Rates in Nepal
Visit our rate pages for the latest comparisons:
Use Our Calculators
Not sure how much you will earn? Try our free calculators:
- RD Calculator Nepal — enter your monthly amount, tenure, and rate
- FD Calculator Nepal — enter your lump sum, tenure, and rate
FAQs
Can I have both RD and FD at the same bank?
Yes. In fact, many financial planners recommend using RD for monthly savings and converting the maturity amount into an FD for compounding at a higher rate — a strategy called “RD-to-FD rollover.”
Is RD interest taxed in Nepal?
Yes. Interest income above NPR 10,000 per year is subject to 5% TDS in Nepal, applicable to both RD and FD products.
What happens if I miss an RD installment?
Most banks in Nepal charge a small penalty for missed installments (typically NPR 50–200 per month). If installments are missed for 3+ consecutive months, the account may be discontinued.