Profit rates on most savings schemes slashed

National Savings has reduced interest rates on many savings products by up to 160 basis points starting December 19, attributing the adjustment to lower market interest rates.

The state-owned savings institution, offering various deposit schemes, announced cuts in profit rates for special savings accounts, short-term savings certificates, pensioners' benefit accounts, regular income certificates, and Behbood savings certificates.

The most significant reduction was observed in special savings accounts, dropping by 160 basis points to 16.40 percent annually. Short-term savings certificates also experienced decreases ranging from 96 to 102 basis points, depending on maturity.

Profit rates for pensioners' benefit accounts and Behbood savings certificates, serving senior citizens and martyrs' widows, were lowered by 24 basis points to 16.08 percent annually.

Regular income certificates, providing monthly profits to depositors, saw a 96 basis points reduction to 15.12 percent annually.

However, National Savings maintained unchanged profit rates for savings accounts and defense savings certificates at 20.5 percent and 14.48 percent annually, respectively.

The institution also adjusted rates for its Shariah-compliant Sarwa Islamic Term Account (SITA), with changes ranging from 6 to 23 basis points for one-year, three-year, and five-year maturities.

The Central Directorate of National Savings directed regional offices to issue blank certificates at the revised rates from December 19, 2023.

National Savings scheme rates are linked to Pakistan Investment Bonds (PIB) for medium and long-term instruments and T-bills for short-term securities.

The revision aligns with the market scenario and the central bank's unchanged policy rate at 22 percent, following its decision last week, citing an anticipated decline in future inflation.