National Savings Revised: Profit Rate Drops

The Central Directorate of National Savings has revised the profit rate on Regular Income Certificates (RICs) to 11.74%, down from the previous rate of 12.04%, for the third time in under three months, affecting investors who purchase these certificates in denominations ranging from Rs. 50,000 to Rs. 10,000,000.

The Regular Income Certificates, launched in 1993, offer a fixed return on investment for a five-year period, with profit paid monthly, starting from the date of issue. This investment is exempt from Zakat deduction, making it an attractive option for investors seeking predictable returns. The revision in profit rate may impact the attractiveness of these certificates, especially considering the recent trend of net withdrawals from National Savings Schemes (NSS), which experienced net outflows of Rs381.87 billion in FY2023.

Despite the revision, certain categories within NSS have seen significant inflows. In January, NSS received Rs31.16 billion, a notable increase from Rs20.78 billion in December. Specifically, Regular Income Certificates (RIC) and Special Savings Certificates (SSC) recorded inflows of Rs8.75 billion and Rs3.77 billion, respectively. Prize Bonds also attracted Rs2.49 billion, and other NSS categories saw a rise in receipts, totaling Rs16.21 billion, compared to Rs12.32 billion in December.

The Central Directorate of National Savings' decision to revise the profit rate on RICs reflects the ongoing efforts to manage the national savings landscape, considering both the needs of investors and the financial dynamics of the country. As the economic situation continues to evolve, it remains to be seen how these changes will impact the attractiveness of national savings schemes to investors.