National Savings Schemes Get a Major Cut in Profit Rates


The government has decided to reduce the profit rates on all national savings schemes and accounts of the Central Directorate of National Savings (CDNS) with immediate effect in line with cuts in the benchmark interest rates.

The Central Directorate of National Savings (CDNS) has slashed the interest rate by 1% on the savings certificates investment applicable from June 02, 2020.

Interest rates on savings scheme are linked to cut-off yield of long term Pakistan Investment Bonds (PIBs). In recent months PIBs yields fell sharply after the State Bank of Pakistan cut the policy rate by 525 basis points in the space two months to ease the impact of COVID-19 on the economy.

According to a series of notifications issued by the ministry of finance,

  • The return on regular income certificates has been reduced to 7.44% from 8.28%.
  • The return on special savings certificates has been reduced to 7.10 % from 8.10%.
  • Profit payable on the deposits made in savings bank accounts has been fixed at 6.5 % per annum where withdrawals are made through other than cheques.
  • The rate of return on Bahbood savings certificates has been slashed to 9.84 % from 10.32 %.
  • Profit payable on defense savings certificates has been reduced to 8.05% from 8.54%.
  • The rates of return on pensioners’ benefit account and Shuhada’s family welfare account have been slashed to 9.84% from 10.32%.
  • The rate of profit on payable on the deposits made in savings accounts has been cut to 6.50% from 7%.
  • The rates of returns on short-term savings certificates have been slashed to 7.72% from 7.80% for three-month, 7.36% from 7.50% for six-month and 7.30% from 6.95% for twelve months.

The profit rate was already brought down from 10.56 % in April.

“In case the profit earned on or after the 1st February, 1992 on special savings certificates is drawn on due date, the undrawn profit will automatically stand invested with effect from the date of accrual,” a notification said.

According to a CDNS official, CDNS did not accept institutional investment, but only individual investments were encouraged to deposit for saving in the National Savings.

The Central Directorate of National Savings was tasked to collect Rs. 352 billion in savings during the current fiscal year (FY19-20), as opposed to the actual collection of Rs. 410 billion in the last fiscal year.

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