The Central Directorate of National Savings (CDNS) has issued a notification that it has revised profit rates on different schemes, effective from September 1, 2018.
The government has increased profit rates on National Savings Schemes in the range of 72 to 100 basis points. This is for the third time in the past five months that the finance ministry has revised the rates upwards.
Saving accounts got the highest jump of 1 percent in profit rate to settle at the new rate of 6 percent per annum from 5 percent.
Profit rates on short-term savings certificates of three-, six- and 12-month were revised up 0.96 percent to 7.36 percent, 7.42 percent and 7.52 percent from 6.40, 6.46 and 6.56 percent, respectively.
Moreover, the rate for Shudafa Welfare Certificate, Pension and Behbood increased by 72 basis points (0.72%) respectively. The new rate would be effective from September 1, 2018, and it would be 10.92 percent.
Rate on Special Savings Certificates (registered)/Accounts increased0.77 percent to 7.87 percent from 7.10 percent. The rate on Defence SavingsCertificates increased 0.75 percent to 9.05 percent from 8.30 percent. The rate on Regular Income Certificates rose to 0.74 percent to 8.78 percent from 8.04 percent respectively.
The latest increase in profit rates is third in a row during the year 2018, following the sharp rise in Pakistan Investment Bonds after the rise in the benchmark interest rate of the State Bank of Pakistan.
According to the latest data of State Bank of Pakistan in statistical bulletin, the investment in Behbood certificates amounted to Rs 794 billion, special saving certificates Rs 381 billion, regular income certificates Rs 347 billion and defense saving certificates nearly Rs 336 billion.
The size of investment in national savings has reached around Rs 3.6 trillion where during last fiscal year net investment was around Rs 202 billion while in 2016-17 it was around 207 billion.
The Central Directorate of National Savings has recently prepared a new instrument for attracting overseas Pakistanis, the spadework for which has been completed with the approval of the Federal Cabinet remaining.
The overseas Pakistanis could invest in this product from a minimum investment of $1000 or equivalent to Pak rupee and will get a return of about six to seven percent per annum on an initial basis.
According to an official, in the first year, there has been a possibility that investment might amount to $500 million to $1 billion. Moreover, these products will have a maturity period of three to five years.
CDNS is a premier financial institution, offering retail government securities and savings products (known as national savings scheme), on a level playing field to small savers through diversified product mix.