Profit rate on savings plans increased by up to 125 basis points

0

KARACHI: The government on Saturday hiked profit rates up to 125 basis points on various National Savings Scheme (NSS) certificates in line with the hike in the policy rate and the recent surge in market coupon-cut yields secondary.

The Central Directorate of National Savings (CDNS) has raised the profit rates on savings accounts and the ordinary account. Profit rates on Retirement Benefit Accounts, Behbood Savings Certificates, Special Savings Accounts and Defense Savings Certificates remained unchanged.

The profit on retirement benefits and Behbud savings and special national savings certificates will remain unchanged at 14.16% and 13%.

The yield on savings accounts and certificates is linked to central bank policy rates and is normally kept slightly higher to attract small savers without significantly affecting the government budget.

According to a series of notifications issued by the Ministry of Finance, the CDNS increased the profit rate on regular income was increased by 24 basis points each to 12.60 percent while the profit rate on an account of savings was revised upwards by 125 basis points. at 13.50%.

CDNS sent revised rate sheets to all regional offices with instructions that the existing stock of blank savings certificates and regular income certificates would henceforth be used by affixing rubber stamps with the revised rates before issuance.

National Savings Scheme rates are usually announced every two months and are linked to the limit yield of Treasury bills and long-term Pakistani investment bonds.

At the last auction, the limit yield of three-year Treasury bills stood at 15.75%, the yield of six-month paper at 15.80% and that of 12-month paper at 15.94 %.

On July 7, the State Bank of Pakistan (SBP) raised the policy rate by 125 basis points to 15%.

The government will launch tariffs for new Islamic products in September.

The announced rise in profit rates on the various instruments of the National Savings Plans is above all part of a protective reaction in the face of almost galloping inflation.

Consumer inflation accelerated to its highest level in 14 years in July due to soaring food prices, fueled by a battered rupee.

Rising inflation has eroded the purchasing power of fixed income groups such as wage earners and pensioners.

CPI inflation rose to 24.93% in July, while in July 2021 it was recorded at 8.4%. That compares with a 21.3% jump in June. This level was last observed in August 2008.

Share.

Comments are closed.