Rising profit rate for all savings plans – Journal

ISLAMABAD: In line with the recent hike in the central bank’s key rate, the Central Directorate of National Savings (CDNS) on Thursday increased the profit rates of all national savings schemes up to 2%.

The new rates would apply to deposits and investments made on December 10. The State Bank of Pakistan (SBP) had increased its discount rate from 1.5% to 8.75% in November and 0.25% in September.

The yield on savings accounts and bonds is linked to central bank policy rates and is normally kept slightly higher to ensure better returns for small savers without significantly affecting the state budget.

According to the notifications published here, the CDNS, under the Ministry of Finance, increased the rate of profit of the Defense Savings Certificate (DSC) to 10.98pc from 9.37pc, an increase of 161 basis points ( pb). It stood at 9.29 pc in May of this year.

Likewise, the yields on the Behbood savings certificates, the retiree benefit account and the Shuhada family welfare account rose to 12.96 pc from 11.04 pc, up 192 basis points.

The yield on regular income certificates has been increased to 10.80pc of total investment from the current rate of 8.78pc, up 204bp. The profit margin on special savings certificates and special savings accounts was also increased to 10.60% from 8.20% currently, an increase of 161 basis points.

In addition, the yield on the savings account was increased to 7.25 pc against 5.5 pc currently, up 175 basis points.

CDNS sent revised rate sheets to all regional offices with instructions that the existing stock of blank special receipts, regular income bonds and defense savings bonds would now be used by stamping in. rubber bearing respectively issue 48, issue 45 and issue 44, as well as the pre-issue rates.

Officials said profit rates had been revised due to a 150 basis point increase (from 7.25 pc to 8.5 pc) in benchmark interest rates announced by the SBP on November 19.

National savings plan rates are announced every two months and are linked to the threshold yield on long-term Pakistani investment bonds. At the last auction a few days ago, the GDP yield ranged from 9.4% for three-year papers to 12.4% for 30-year bonds.

One official said rates were revised upwards due to higher secondary market yields on long-term GDPs and treasury bills, in line with the SBP’s key rate hike.

Posted in Dawn, le 10 December 2021

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