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Savings schemes profit rates go up

September 06, 2018

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ISLAMABAD: In line with the uptick in key interest rate by the central bank, the Central Directorate of National Savings (CDNS) has increased the profit rates for its policy holders.

According to a notification issued by the CDNS on Wednesday, the new profit rates took effect on Sept 1.

The highest returns have been announced on Behbood Savings Certificates, Pensioners Benefit Accounts and Shuhada Family Welfare Accounts, which have been raised to 10.92 per cent from 10.20pc.

The profit rates on Defence Savings Certificates have been raised to 9.05pc from 8.30pc. The average profit on Special Savings Certificates has been enhanced to 7.87pc from 7.10pc. The profit on Regular Income Certificates has been raised to 8.78pc from 8.04pc.

The highest interest rate increase of 1pc has been made in the returns on Savings Account to 6pc from 5pc.

The profit on three-month certificates has been enhanced to 7.36pc from 6.40pc, on six-month certificates to 7.42pc from 6.46pc and on 12-month certificates to 7.52pc from 6.56pc.

The State Bank of Pakistan had increased the policy rate by one per cent in July.

The interest rate hike has been beneficial for the pensioners and other individuals as they will benefit from higher returns at their investments in national savings schemes.

The CDNS had been late in passing out the benefit to its policy holders by one month, while an official of the finance ministry said that the overall increase or decrease in the policy rates are divided among various schemes.

“The increase is much higher over less attractive schemes to make them more appealing for individual investors,” he added.

People have a higher degree of trust in the national savings schemes as these are guaranteed by the government as opposed to the offers made by private banks, which at times even offer higher return, but the individual investors fear defaults by them.

The national savings directorate had earlier increased the profit rates in July based on the policy rate hike made in May.

Market players expect that the central bank is likely to increase the interest rates in its monetary policy later this month and it would lead to further increase in profits of national saving schemes.

Published in Dawn, September 6th, 2018