Interest Rates On Savings Certificates Set To Rise Above 12%2 min read
The interim government is poised to deliver some much-needed relief to fixed-income groups by raising the interest rates on savings certificates to over 12%. This decision comes as inflation continues to erode purchasing power, making it increasingly difficult for many to manage their finances. Currently, the interest rates for the four savings certificates offered by the Department of National Savings range between 11.04% and 11.76% reportedly.
The instruments include the Five-Year Bangladesh Savings Certificate, Three-Monthly Profit-Bearing Sanchayapatra, Five-Year Family Savings Certificate, and the Five-Year Pensioners’ Savings Certificate.
Starting January 1, a new system will be introduced to determine the interest rates for these savings certificates. The rates will now be tied to the government’s treasury bond interest rates. According to finance ministry officials, the chief adviser has already approved the system, and the Internal Resources Division of the finance ministry will issue an official notification soon. This linkage to treasury bonds aims to ensure a more dynamic and market-aligned approach.
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Under the updated mechanism, the interest rates will be based on the weighted average of the government’s five-year and two-year treasury bond rates, reviewed every six months. Additionally, a premium of up to 50 basis points will be added to these averages when setting the rates for savings certificates, ensuring an attractive return for savers.
The new rates represent a significant improvement. For the Five-Year Bangladesh Savings Certificate, the rate will be 12.4% for investments up to Tk 7.5 lakh and 12.37% for amounts above that. In contrast, the current rates vary from 11.28% to as low as 9.3%, depending on the investment amount. Similarly, the Three-Monthly Profit-Bearing Sanchayapatra will offer 12.3% to 12.25%, an increase from the existing 11.04% to 9%.
For the Five-Year Family Savings Certificate, the interest rate will rise to between 12.5% and 12.37%, compared to the current 11.5% to 9.5%. Pensioners will benefit the most, with the new rates for the Pensioners’ Savings Certificate set at 12.55% to 12.37%, up from the existing range of 11.76% to 9.75%.
Notably, the interest rates on other savings instruments, such as the Wage Earners Bond, US Dollar Investment Bond, and US Dollar Premium Bond, will remain unchanged. This decision highlights the government’s targeted approach to providing relief while maintaining stability in other savings avenues.
By linking savings certificate rates to treasury bonds, the government aims to offer competitive returns that reflect market conditions. This adjustment underscores its commitment to easing financial pressure on savers while ensuring a fair and sustainable system. The official notification is expected soon, and savers are encouraged to stay informed as the new system takes effect.
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