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Thursday October 06, 2022

National Savings profit rates cut as inflation sharpens

By Our Correspondent
February 05, 2022

ISLAMABAD: The government has cut profit rates on different instruments of National Savings Schemes (NSS), primarily in a protective reaction to a nearly runaway inflation, an official statement said on Friday.

The government, however, jacked up the profit rate on Savings Accounts by 1 percent to 8.25 percent.

The revised rates will become effective from February 4, 2022, till any further revision.

This reduction in profit rates followed the CPI (Consumer Price Index) based inflation’s touching 13 percent, the highest ever in two years. The rising inflation has eroded the purchasing power of fixed income groups such as salaried and pensioned ones.

Official sources, while talking to The News, said the government decided to raise the rate on Savings Account after the launching of ATMs for the customers.

According to the official notification issued by Central Directorate of National Savings (CDNS) on Friday said the government cut profit rate on Behbood Savings Certificates by 72 basis points to 12.24 percent, while on Regular Income Certificate it was slashed by 48 basis points to 10.32 percent.

The profit rate on Special Savings was brought down by 40 basis points to 10 percent.

However, it is quite interesting that the government reduced profit rates on different NSS when the discount rate was at 9.75 percent. The policy rate was increased in two consecutive meetings of Monetary Policy Committee, while in last meeting held in last week of January 2022, the rate was kept unchanged at 9.75 percent.

Moreover, profit rate on Rs10,000 short-term Saving Certificate was fixed at Rs242 for 3-month maturity, Rs506 for 6-month, and Rs1,020 for 12-month maturity.

Profit rate on Rs100,000 short-term

Saving Certificate is now Rs2,420 for 3-month, Rs5,060 6-month, and Rs10,200 for 12-month maturity.

The rate on Rs10 million short-term Saving Certificate, was set at Rs242,000 for 3-month, Rs506,000 for 6-months, and Rs1,020,000 for 12-month maturity period.

Comments

    Maqsood commented 8 months ago

    Why did government reduced Profit Rates despite high inflation and SBP has also increased interest rates

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