Kathmandu. Lately, savings of savers have been found to be scattered. Savers, who were attracted to fixed deposits due to attractive interest rates in the past, have recently shifted to other saving options.
Statistics show that savings from fixed deposits have started moving to other areas. As a result, the proportion of deposits deposited in fixed accounts in banks and financial institutions has been steadily decreasing.
Nepal Rastra Bank (NRB) data shows that banks and financial institutions have collected deposits of Rs 6,768 billion till Mid-March 2019. Of the total deposits, rs 3,869 billion is in fixed deposits. Fixed deposits account for 57.15 per cent of the total deposits.
The share of fixed deposits has come down to 51.7 per cent in February 2081 from 61.3 per cent in July 2018. According to the central bank data, the share of fixed deposits has decreased by 9.6 percentage points from July 2080 to February 2019.
In recent times, savers have been attracted to other attractive options of saving. In recent times, savers have started opting out of fixed deposits as the interest on fixed deposits has been lower than that of ordinary deposits.
In recent months, banks have been reducing interest rates on fixed deposits to reduce costs. The interest rates of many banks are lower than ordinary savings. Dozens of banks have lowered interest rates on short-term fixed deposits since April 1.
NIC Asia, Machhapuchhre, Sanima, NMB, Everest, Standard Chartered, Krishi Bikas, Laxmi Sunrise, Kumari, Himalayan and Nepal Bank have reduced interest rates on short-term term deposits. Experts say that this will further reduce the share of fixed deposits in the total deposits.
The weighted average interest rate on deposits of commercial banks was 4.54 percent, development banks 5.32 percent and finance companies 6.36 percent. The weighted average interest rate on deposits of commercial banks stood at 8 per cent, development banks at 9.28 per cent and finance companies at 10.13 per cent in July 2018.
As interest rates continue to fall, fixed deposits are also declining. At present, the trend of withdrawing fixed account deposits and investing in the stock market is increasing. Apart from this, the deposits of fixed accounts of banks and financial institutions are decreasing at a time when the stock market is gaining attraction due to lack of opportunities for other investments.
The share of fixed deposits in the total deposits of banks and financial institutions in mid-February of the current fiscal year is 51.7 percent. It was 58.7 per cent in the year-ago period. The share of fixed deposits in the total deposits of banks and financial institutions was 57.5 percent in July last year. The share of fixed deposits stood at 61.3 per cent in July 2080.
Banks and financial institutions have collected deposits of Rs 6,768 billion till Last March. Fixed deposits account for 57.15 per cent of this deposit. In the same period of the last fiscal year, banks and financial institutions collected deposits of Rs 6.186 trillion, of which the share of fixed deposits was 58.7 percent.
