National Savings profit rates slashed again

Islamic Saving Account profit rate is slashed by 59 basis points, reducing profit rate to 9.75%
An undated image of the Central Directorate of National Savings building. — APP

An undated image of the Central Directorate of National Savings building. — APP

The federal government has once again reduced the profit rates on National Savings Schemes, affecting millions of investors across Pakistan.

According to the Central Directorate of National Savings (CDNS), this downward revision includes key instruments such as Defence Saving Certificates, Special Saving Certificates, and Islamic Saving Accounts.

National Savings profit rates cut

National Savings Schemes are popular options for pensioners, salaried people, and small investors looking for safety and regular returns from their savings. These schemes are government-backed investments and are often viewed as a safe alternative to other asset classes such as stocks or property.

However, the most recent cut in profit rates is likely to impact the monthly incomes of many of those reliant on the income made from these savings.

According to the latest notification, Defence Saving Certificates have been cut to a lower rate of return of 11.76% per annum from 11.91%, reflecting a cut of 15 basis points.

Meanwhile, Special Saving Certificates have been cut from 10.90% to 10.60%, a total cut of 30 basis points. The Islamic Saving Account profit rate has also been slashed by 59 basis points, reducing the profit rate to 9.75%.

In addition, the rate on the Shuhada Family Welfare Account has been reduced to 13.20, reflecting a cut of 24 basis points, while Regular Income Certificates dropped by 20 basis points.

This is a further adjustment and comes only weeks after other cuts in the rates made recently in May, when the returns on savings accounts were reduced by a total of 100 basis points, to 9.5%.

However, experts believe the cuts may discourage low-risk investors and pensioners who depend on fixed-income instruments.