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CDNS cuts savings rates for third time in 2 months

CDNS achieves Rs1
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February 22, 2024 (MLN): The Central Directorate of National Savings (CDNS) has once again announced a reduction in the savings account profit rates, whereby the rates have been slashed by up to 72bps.

To note, in just the last two months the rates have been slashed three times.

The new profit rates are effective from February 21, 2024.

Investment Type Current Profit Rate Previous Profit Rate Change (bps)
Bahbood Savings Certificates 15.36% 16.08% -72
Defence Savings Certificates 14.10% 14.10% 0
Special Savings Certificates 15.60% 16.00% -40
Regular Income Certificates 14.64% 15.00% -36
Short Term Savings Certificates 20.34% 20.34% 0
Savings Account 20.50% 20.50% 0
Pensioner Benefit Account 16.08% 16.08% 0
Shuhada Family Welfare Account 15.36% 16.08% -72
Sarwa Islamic Savings Account (SISA) 20.50% 20.50% 0
Sarwa Islamic Term Account (SITA) 1 year 18.54% 18.54% 0
Sarwa Islamic Term Account (SITA) 3 year 15.20% 15.40% -20
Sarwa Islamic Term Account (SITA) 5 year 14.76% 15.00% -24

Rates per annum

The Short Term Savings Certificates, Savings Account, and Sarwa Islamic Savings Account (SISA) still stand above 20% annual rate.

Short Term Savings Certificates (STSCs) program is pledgeable and offers maturity schemes of 3 months, 6 months, and 1 year.

The minimum investment required is Rs10,000, with no maximum investment limits.

Savings Account (SA) is the oldest/primeval offering of the National Savings with a product design to encourage the small savers.

The minimum investment required is just Rs100, with no maximum investment limits.

All Pakistani nationals, as well as Overseas Pakistanis, can purchase STSCs and SA individually as a single adult, as a minor, or jointly with another adult. Payments can be received jointly by both holders (Joint-A) or by either one of the holders (Joint-B).

An adult can also purchase STSCs on behalf of a single minor, jointly with two minors, or as a joint holder with a minor.

Sarwa Islamic Savings Account (SISA) is based on the Shariah structure of Wakala-bil-Istismar which is an Investment Agency or a delegated authority whereby a Muwakkil (principal) appoints the Wakeel (agent) to carry out a specific job on behalf of the Muwakkil.

In case of SISA, the accountholders act as principal and request RNS/CDNS to appoint Ministry of Finance (MoF) as its agent in relation to the investment of the Muwakkil’s funds under the respect SISA and SITA (as the case may apply) on an unrestricted basis in Government’s projects/ revenue generating assets (the Shariah Approved Project Portfolio).

Pursuant to request, CDNS will request MoF to enter into Shariah based arrangements for managing the investments and generating profit for the accountholders.

Accountholders are entitled to the actual profit under the relevant Wakala-bil-Istismar investment made under the respective SISA product (the Wakala Profit) and the anticipated profit rates for such investments are calculated and disclosed by RNS/CDNS on the basis of their pro rata investments.

If profit earned is higher than anticipated profit rates, the excess will be an incentive granted to MoF as the agent.

In case of any loss on the investments, the principal being respective SISA account holder (duly represented by RNS/CDNS) bears proportionate risks associated with the acts of the agent under the Wakala except those losses resulting from the Wakil’s gross negligence, willful misconduct, breach or fraud.

The minimum investment required is just Rs100, with no maximum investment limits.

To note, on January 26, CDNS had slashed profit rates by up to 2.83%.

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Posted on: 2024-02-22T11:36:09+05:00