Savings account to pay 6.5% profit now
The government has slashed profit rates for its national savings schemes for the third time this year, bringing the profit rates for savings account down by 200 basis points to 6.5%/
The profit rates peaked last year to above 12%, but this year National Savings, the largest investment and financial institution in Pakistan, started slashing profit rates for savings schemes that come under its umbrella. It reduced rates in January and April. The new rates announced on June 2 come as a third cut of the year.
Under the new rates, if you put Rs100,000 in a Savings Account, you will make a profit of Rs6,500 per year. Pensioners Benefits Account and Behbood Savings certificates to offer 9.84% annual profit.
The State Bank of Pakistan has also cut its monetary policy rate by 5.25% in the last three months, bringing the benchmark interest rates down to 8%.
After today’s rate cuts, the profit offered by various schemes under the National Savings umbrella is expected to go down by 0.5% to 0.9%. This is the range of the cut, not the actual rate after the cut. Profit rates for all the schemes can be found on the National Savings website.
With more than seven million investors, National Savings is the largest investment and financial institution in Pakistan with over Rs3.4 trillion in its kitty. People can invest in its products through its 376 branches across Pakistan.
It is a department attached to the finance ministry that promotes a culture of savings by mobilizing national savings. The channel was first used during the World Wars I and II by the British Government to raise funds for war-related expenses.
Besides promoting financial savings in the economy, it generates funds for the government to finance a budgetary deficit (loss) and infrastructure (schools, hospitals, roads, bridges and dams etc.).