National Savings Scheme rates increased

VIASalman Siddiqui
SOURCEThe Express Tribune

KARACHI: The government has increased the rate of profit by 12.5 basis points on national saving schemes with effect from July 1, 2018, according to the Central Directorate of National Savings (CDNS).

This is the second time in the last three months that the government has revised up the rates.

“This (rate hike) is in line with the uptick in key interest rate by the central bank,” Insight Securities’ Analyst Zeshan Afzal said in a comment to The Express Tribune.


The State Bank of Pakistan (SBP) increased the key interest rate by a cumulative 75 basis points, making it 6.5%, since January 2018.

He elaborated that the adjustment in the rate of profit on the saving schemes was due since banks revised up the rate of returns on their saving accounts.

“Theoretically speaking yes, the rate hike should attract higher investment in the savings certificates by individuals,” he said. “However, since the rate hike is small, it might not invite a magnified boost in investment.”

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The CDNS, which offers national saving certificates to individuals to attract investment, provides the raised funds to the government, which mostly uses the funds for budgetary financing.

“The rate hike would increase the cost of government borrowing through CDNS,” he added.

According to CDNS latest announcement, the rate of profit on Behbood Saving Certificates (BSCs), Pensioner Benefit Accounts, and Shuhada Family Welfare Account has been increased by 12 basis points each to 10.20%.

BSCs offering a high rate of return with a 10-year maturity period were launched by the government on July 30, 2003.

Initially, BSC was meant for widows only; however, it was decided later by the government to extend the facility to senior citizens aged 60 years and above with effect from January 1, 2004.

It has now further been extended to differently-abled persons holding NIC or special minors through guardians with effect from April 23, 2018.

In May 2018, the government launched the Shuhada Family Welfare Account. The families of martyred may invest in this scheme.

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The government has also increased rate of profit on Defence Savings Certificates by 20 basis points to 8.30%. The rate of profit on Special Savings Certificates (Registered)/Accounts has been increased by 30 basis points to 7.10%.

Profit on Regular Income Certificates surged by 0.408% to 8.40%. Profit on Savings Account revised up by 50 basis points to 5%.

The rate of profit on Short Term Savings Certificates; 3-month, 6-month and 1-year increased to 6.40%, 6.46% and 6.56%, respectively, from 5.92%, 6.04% and 6.25%.

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