You just received Rs 20 lakh in Nepal: the deployment decision tree

A cousin came home from Doha in Bhadra with his end-of-service money, six years of it, and a question he asked three different people over three different cups of tea. The manpower agent said land. His bank's relationship officer said a five-year FD. A friend from the site said a hydropower IPO. Each answer was a product, and none of them asked what the money was for.

The same question lands every Asoj. Dashain bonus, a plot that finally sold, a mature life policy, a share of an inheritance. The amount is usually somewhere between Rs 10 and 30 lakh, larger than the household has ever held in one account, and the pressure to do something with it arrives before the plan does. This post is the plan: a decision tree with the numbers for Asoj 2083 filled in.

Step 0: park it, and do not decide for thirty days

Money that arrives in a lump gets spent in a lump. Put it in a savings account in your own name, ideally the remittance savings account if it came from abroad, since NRB requires banks to pay about a percentage point more on those; the receiving family's playbook covers that account. Then do nothing for a month.

The cost of waiting is trivial. Rs 20 lakh at a 2.75% savings rate earns about Rs 4,600 in a month; the best one-year FD at 3.20% would earn about Rs 5,300. The difference is a tank of petrol. The cost of not waiting is the cooperative deposit, the relative's business loan, or the plot signed on the second week home, which is where returnee money has historically gone.

One thing to check in that month: the Deposit and Credit Guarantee Fund still insures Rs 5 lakh per depositor per institution, savings and fixed deposits combined. The FAQ was checked on 26 September 2026 and the limit has not moved. Rs 20 lakh in one bank is one-quarter guaranteed; across four A-class banks it is fully guaranteed. That split is a Step 0 job, not a later one.

Branch 1: is anything costing you more than 5%?

If yes, that is where the first rupees go, and the branch closes fast because no deposit product comes close.

NRB's one-month report for FY 2083/84, published 18 September 2026, puts the average base rate of commercial banks at 4.72% and the weighted average lending rate at 6.48%. Personal loans and overdrafts sit on top of base: Nepal SBI prices personal loans at base plus 1 to 3 points on a 5.05% base, NMB at base plus 2.5 to 4.5, Global IME at 9.99 to 11.99% fixed. Floating home loans are cheaper: Saral Banking Sewa's Asoj 2083 comparison runs from Nabil's 4.91 to 6.91% to Prabhu's 5.69 to 8.94%.

Against that, the deposit side. Nabil's Asoj 2083 sheet pays 3.00% on a one-to-two-year FD; the best one-year rate found across the twenty commercial banks was Nepal SBI's 3.20%; NIC Asia pays 2.75% on anything up to two years. After the 6% TDS, call it 2.6 to 3.0% net.

My arithmetic, simple interest for one year. A personal loan, an overdraft, a cooperative or microfinance loan, the recruitment loan that paid for the visa: all of these cost two to three times what the bank will pay you, and repaying them is a guaranteed, tax-free return at that rate. The snowball versus avalanche post sequences several loans; with a lump sum the sequence is simply highest rate first.

The home loan is the one honest exception. At a 5 to 6% floating rate the gap to a deposit is still real, but the loan also has a premium that can be negotiated down as base rates fall, and prepaying it is a liquidity decision as much as a return decision. Whether to prepay early has its own post; the short answer is that partial prepayment after the buffer in Branch 2 is funded is rarely wrong.

Branch 2: six months of expenses, plus anything with a date on it

The buffer comes before any investing, and it has two layers.

The emergency layer. Six months of household spending, sized in the emergency fund post. For a Kathmandu family spending Rs 80,000 a month that is Rs 4.8 lakh. It lives in savings at 2.75% and a couple of three-month FDs at 2.75 to 2.82%, which is what Nabil and Nepal SBI pay this month. The three-month FD is the shortest NRB allows; the premature withdrawal post explains why breaking a longer one costs a bank-specific penalty of a point or three.

The dated layer. A wedding in two years, a sister's tuition deposit next Baisakh, the down payment on the flat you have already decided on. Money with a date inside three years does not go into equities, whatever the market is doing. It goes into an FD that matures just before the date, or a ladder if there are several dates. Nabil pays 3.25% for two to five years, Nepal SBI 3.90% for two to three; the sinking funds post is the same idea at monthly scale.

Here is the uncomfortable table for both layers:

Rs 20 lakh for one year, my arithmetic. Rates from the Asoj 2083 bank notices; the 4.55% is Prabhu's and needs a tenure over ten years. Inflation is the mid-August 2026 print, up from 1.68% a year earlier, though the FY 2082/83 average was a much milder 3.08%.

Every row is negative in real terms. That is not a reason to skip the buffer. It is the price of certainty, and the where-to-park post argues the price is worth paying only for money that has a job. Depositors have noticed: NRB reports fixed deposits fell to 35.6% of total deposits in mid-August 2026 from 48.4% a year earlier.

Branch 3: the rest is five-year money, and it gets a menu, not a product

Whatever survives Branches 1 and 2 is money you will not need for at least five years. In the cousin's case: Rs 20 lakh, minus Rs 4 lakh of loan, minus Rs 5 lakh of buffer, minus Rs 4 lakh for a wedding in 2085, left Rs 7 lakh. The "what do I do with 20 lakh" question was really a "what do I do with 7 lakh" question, which is a calmer one.

The menu, priced this month. The planning returns in the last column are the house numbers this blog uses, and they are judgements, not forecasts.

Sources: bank rates as above; bonds from Khabarhub's 2087 issue notice and the PDMO auction calendar, which lists only treasury bills and development bonds for Asoj; the fund's FY 2081/82 dividend and its NAV of Rs 10.15 on 23 September 2026; the 24 September NEPSE close; FENEGOSIDA's 16 September gold rate; the revised land valuations; the FY 2083/84 capital gains rates.

Three observations the table makes on its own.

The bonds are the best safe rate and they are not for sale. The 2087 Citizen Savings Bond's 6.5% and the Foreign Employment bond's 7.5% both beat every deposit by three to four points, with a government guarantee and a Rs 10,000 minimum. Both windows closed on 11 December 2025. A returnee has six months from arrival to qualify for the 7.5% paper, so the PDMO notice page is worth a weekly look; the bonds post explains the application route, and the coupon has fallen from 11.5% in 2023 to 6.5% now, so the next issue may pay less.

Equities are priced for patience. NEPSE's 2,629.81 is almost exactly where it started 2026 and about 8% below its Baisakh 2083 open of 2,866.87. The last dated market P/E, 38.32 in late October 2025, was near a record; no fresher figure was published that I could find, and NRB's market-cap-to-GDP reading of 68.9% in mid-August is down from 75.1% a year earlier. Whether that is expensive is its own post. The relevant point for a lump sum is the drawdown history: the index fell about 43% from its 2021 peak, and someone who put all Rs 7 lakh in at the top waited years to see it back. Lump sum beats SIP roughly two-thirds of the time in the global data; phasing over six to twelve months buys insurance against the other third at a small expected cost.

Gold has just done its decade in a year. Rs 2,17,100 a tola on 17 September 2025 to Rs 3,01,800 on 16 September 2026 is a 39% rise in twelve months, most of it the dollar price, which NRB records as up 31.6% year on year. Rs 7 lakh buys about 2.3 tola today, and the buy-sell spread on jewellery eats the first year or two of any gain before the metal moves. The house planning number for gold is inflation plus rupee depreciation, around 6%. Own a tola or two for what it does to the portfolio; do not buy 2.3 tola because of last year.

What the cousin actually did

The tree applied to his Rs 20 lakh, decided over four weeks in Bhadra and Asoj.

The rate on the remittance account is from NMB's Asoj notice; the rest are the bank rates cited above. The land conversation with the manpower agent ended at the government valuation sheet: Rs 62.7 lakh an aana at Chabahil, Rs 22.25 lakh at Tokha, and those are the floors the Malpot taxes on, not asking prices. Rs 20 lakh is a third of an aana in Chabahil before the registration fee. That was the end of the land branch, which is the normal ending for a sum this size in the Valley; the land-vs-NEPSE-vs-gold-vs-FD look-back covers what a larger sum would weigh.

What he did not do is also the point. No cooperative, though two offered 13%. No loan to the brother-in-law's pharmacy. No IPO with more than the Rs 10,000 that any application costs, though the foreign-employment IPO quota is one lever that is genuinely his and not his family's.

The Dashain-bonus version of the same tree

Most readers will not get Rs 20 lakh this Asoj. They will get the festival allowance the Labour Act fixes at one month's basic pay, or a profit bonus under the Bonus Act, for most salaried readers somewhere between Rs 30,000 and Rs 1.5 lakh after the tax on it. The tree is identical at that scale. Step 0 is a week rather than a month. Branch 1 is the credit card or the BNPL balance. Branch 2 is topping the emergency fund back to six months after last year's Dashain drained it. Branch 3 is one extra SIP instalment, or one tola. The Dashain cost post shows where the bonus usually goes instead.

What you actually need to know

1. Debt first, and the arithmetic is not close. Personal loans and overdrafts cost roughly 7 to 10.5% this Asoj; the best one-year FD pays 3.20% before TDS. Every rupee of expensive debt repaid earns three times what the bank offers, guaranteed.
2. The buffer loses to inflation and you build it anyway. Savings at 2.75% and FDs at 3 to 4% are all negative after 5.96% inflation; they are for the six months of expenses and any bill inside three years, split so no bank holds more than the Rs 5 lakh DCGF guarantee.
3. The long-term slice is smaller than the headline and should go in slowly. Of Rs 20 lakh, a typical household has Rs 5 to 8 lakh of genuine five-year money. Phase it over six to twelve months, watch for the next 6.5 to 7.5% savings bond, and treat gold's 39% year and the Valley's per-aana prices as reasons for caution, not entry points.

Have a lump sum and a different set of loans, dates and expenses? Email parjanya57@gmail.com with the four numbers and I'll send back the tree filled in for your case.

This post is part of the Nepal Money Basics guide — the investing section.