Govt ups profit rates on savings schemes
The PM gave the go-ahead for notifying an 11-member committee for finding solutions to Pakistan’s economic ills by adding three more members to a list suggested by the Ministry of Finance to the PM House, according to sources.
The federal government on Friday increased the profit rates on national savings certificates and schemes between the range of 48 and 100 basis points.
As per the new plan, the profit on Special Savings Certificates has been increased by 100 basis points to 11%.
Similarly, the profit on Regular Income Certificates has been jacked up by 0.84 basis points to 11.04 %.
The rate of interest for Bahbood Savings Certificates has been increased by 48 basis points to 12.72%
The profit on Defence Saving Certificates has been pushed up by 60 basis points to 10.92%.
The rate of return on Pensioners Benefit Account has been increased by 48 basis points from 12.24% to 12.72%.
However, the profit on Savings Accounts has remained unchanged at 8.25%.
The government has revised the rates upwards to absorb the benefit of a boost in its income from Pakistan Investment Bonds (PIBs).
In February this year, the Central Directorate of National Savings (CDNS) had cut down profit rates on all national savings schemes. However it had increased these on savings bank accounts and short-term savings certificates.
It had slashed the profit rate on Defence Savings Certificates to 10.40% from 11.12% fixed on December 10, 2021, showing a reduction of 72 basis points.
The returns on Behbood Savings Certificates were reduced to 12.40% from 12.96%, down by 56 basis points.
The profit on Regular Income Certificates was reduced to 10.32% from 10.80%, down by 48 basis points.
The returns on Special Savings Certificates and Special Savings Accounts were reduced to 10% from 10.40%, showing a reduction of 40 basis points. The profit on three-year Special Savings Accounts was reduced by 20 basis points to 11.40% from 11.60%.
However, the return on Savings Bank Accounts was increased to 8.25% from 7.25%, up by 100 basis points.
The profit on Short-Term Savings Certificates was increased to 9.68%.
In December last year, the government had increased the rate of profit on various national savings certificates and schemes by up to 240 basis points to pass on the benefit of surge in its income from PIBs and mobilise high investment in saving products.
Read: Govt hikes profit rates on national saving schemes
The Central Directorate of National Savings (CDNS), which offers the saving schemes to the general public, reinvests the funds received from retail investors into three to 10-year PIBs.
Net divestment in the saving schemes and prize bonds was being witnessed as institutional investors continued to pull out investment at maturity given that the government had barred them from investing in the schemes.
Moreover, people were continuously encashing prize bonds having the denominations Rs40,000, Rs25,000 and Rs15,000 because the government had discontinued them.
The CDNS is managing investment portfolio of around 7 million individual and institutional investors. The government utilises the investment attracted through the national saving accounts and certificates to bridge its budgetary deficit.