November 2, 2018: Rate on national savings scheme recorded fifth time increase in the calendar 2018 ranging from 0.96 percent to 1 percent after the central bank tightened the monetary policy stance increasing the benchmark interest rate.
According to information received from the Central Directorate of National Savings Centre, rates on all the instruments have been raised effective November 1, 2018. The rate of profit on behbood, pension and shudda family risen by 0.96 percent to 11.88 percent.
Rate on saving accounts raised by one percent to 7 percent, rate of profit on defense savings increased by 0.98 to 10.03 percent, rate on special savings increased by 1 percent to 8.60 percent and rate on regular income certificates rises by 0.94 percent to 9.72 percent.
The current increase has been fifth in row in 2018 as the interest rate spiked during the period by almost 2.75 percent to 8.50 percent. The new rates on National Savings Scheme announced after every two months and linked to cut-off yield of long term Pakistan Investment Bonds.
Since January 2018 on Pension and Behbood increased by 4.28 percent from 7.60 percent, special saving certificates by 2.60 percent from 6 percent, regular income certificates by 3.18 percent from 6.54 percent, savings account 3.10 percent from 7 percent and defense by 2.49 percent from 7.54 percent.
Rates in the last three years mostly remained subdued which could be easily gauged from the investment flows in the government based securities. During the fiscal year 2014.15 investment in government securities amounted to Rs 337 billion, in 2015-16 it went down to Rs 233 billion, in 2016-17 207 billion and Rs 202 billion heralded in 2017-18.
In the latest report of the State Bank of Pakistan for the year 20171-18 admitted that the inflows have been falling persistently for the past three years.
This falling trend mainly reflects lower profit rates and higher incidence of withholding tax on non-filers. A disaggregated analysis shows that gross inflows in major schemes increased, however, considerable retirements led to a fall in net terms.