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Pakistan Raises National Saving Rates


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The Government of Pakistan has announced a revision in the profit rates of national savings schemes, increasing them by up to 4.13%. The move aims to make the schemes more attractive and mobilize investments from the general public. The Central Directorate of National Savings (CDNS) has increased the rate of return on several savings schemes, including Special Savings Certificates, Savings Accounts, Short Term Savings Certificates, Bahbood Savings Certificates, Pensioners Benefit Account, Defense Saving Certificates, and Regular Income Certificates.

The revision in rates comes in response to the increasing trend of investors withdrawing from the saving schemes due to the government’s failure to increase the returns in line with other investment instruments. The State Bank of Pakistan reported a disinvestment of Rs. 32.38 billion ($190 million) from saving schemes alone in February 2023, with a total disinvestment of Rs. 285.73 billion ($1.7 billion) in the first eight months of the current fiscal year 2023.

The outflow of investments is attributed to the investors’ premature withdrawal from the schemes and investing in more lucrative instruments like fixed deposits at banks. The outstanding investment in saving schemes (net of prize bonds) reduced to Rs. 2.92 trillion ($17 billion) in February 2023, compared to Rs. 3.48 trillion ($20 billion) in the same month last year, showing a drop of 16% in one year.

The revision in the profit rates aims to address the issue of disinvestment and attract investors to national savings schemes. CDNS reinvests the funds collected from individuals into three to 10-year Pakistan Investment Bonds (PIBs) and distributes profits among its investors from the profits earned on PIBs. The weighted average RoR on national saving schemes should be 95% of the return on PIBs, as per relevant law.

This is the third consecutive year in which investors have withdrawn capital from saving schemes. In 2020, the government banned corporate investors from investing in CDNS saving schemes, as they can invest directly in government debt securities such as T-bills and PIBs.

The revised profit rates of national savings schemes are expected to increase their attractiveness among the public and lead to an increase in investments. The move is also expected to bring stability to the savings schemes’ portfolio, ensuring a stable return for investors.

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