Know Your Options. Choose the Most Suitable One for You.
Every year, you set aside money for tax-rebate investments. But the bigger question is rarely asked: Are you putting it in the right place? With different options available in Bangladesh, each with a different return, risk profile, rebate ceiling, and flexibility. We are all aware of the popular avenues, but the landscape is constantly changing. New instruments have entered the market. Rates are shifting. What worked for you two years ago may no longer be your best move today. So, let’s explore!
National Savings Certificate/ Sanchayapatra (NSC)
NSC is the most popular tax-rebate investment avenue in Bangladesh. If you invest in NSC, you effectively receive a 9% return (if compounded) per year, and you can get up to BDT 75,000 in tax rebates.
However, NSC has two significant limitations: you need to make a one-off investment, and the return decreases if you need to liquidate early before maturity.Â
Deposit Pension Scheme (DPS)
DPS is similar to NSC in terms of returns – you also receive approximately 8.75% – 9.75% per year. However, the tax rebate is much smaller: you receive up to BDT 18,000 through DPS in a year.
DPS is better suited if you want to invest money regularly, as you can save money each month. But because the tax rebate is smaller, many investors look elsewhere for a larger one.
Insurance Products
Some investors purchase insurance policies to obtain tax rebates. However, insurance is an ideal tool for risk management, not for savings goal and you typically get a lower return than other options. Insurance is rarely the preferred choice for investors focused on maximising both returns and tax benefits. But for someone, who is interested to mitigate the risk of their absence, it could be very useful.
Direct Equity Investment
Investing in shares listed on the Dhaka Stock Exchange (DSE) or Chittagong Stock Exchange (CSE) offers the maximum possible tax rebate in Bangladesh – which is 10 lacs taka. This makes it theoretically the most powerful tax-saving tool available.
However, direct equity carries significant risk. Share prices can fall, and the concern over capital loss keeps many investors away. Returns are unpredictable, and a poor market cycle can wipe out the tax benefit entirely. For risk-averse investors, equities are not a comfortable fit.
Direct Treasury Bills & Bonds Investment
Investing directly in government treasury bills and bonds can be considered one of the safest investment of the country. While being eligible for BDT 75,000 tax rebate, it also allows investors to attain higher return than NSC (10%-11%).
However, like NSC, it requires a one-off lump sum investment (minimum BDT 1 lac). But in terms of liquidity, it’s even worse than NSC as you can’t liquidate the investment before maturity.
Debt Mutual Funds
Debt mutual funds that invest your money in government treasury bills and bonds are one of the safest instruments in Bangladesh. With Debt mutual funds that completely avoid investment in stock market, you avoid stock market volatility entirely, while still qualifying for tax rebate up to 75,000 taka. And unlike NSC or direct bonds, you can invest monthly with product like IDLC SIP.
IDLC Income Fund: Pioneering Debt Mutual Fund Revolution
IDLC Income Fund was the first debt mutual fund launched in Bangladesh back in June 2021. It has quickly become the popular choice among investors seeking better safety, higher tax rebate, better return and affordable monthly investment. Here is why IDLC Income Fund is making such a big impact:
| â‘ Safest Investments Only IDLC Income Fund invests in treasury bills and bonds – the safest investment avenue in Bangladesh. It does not invest in the stock market at all. Your money is â‘¡ Better Return: 9.5% – 10.5% Per Year IDLC Income Fund delivers higher potential effective returns than NSC and significantly more than DPS. You earn more, with less risk.  ③ Higher Tax Rebate: ৳75,000 You receive up to BDT 75,000 tax rebate which is four times more than DPS  ④ Affordable Monthly Deposits Unlike NSC and Treasury Bills/Bonds investment, you do not need to invest one large lump sum. Like DPS, you can add money gradually each month – starting from BDT 5,000/month. |
Side-by-Side Comparison
The table below summarizes how the key investment options compare across the most important criteria:
| Feature | NSC | DPS | Insurance | Direct Equity | Direct T-Bills/ Bonds | IDLC Income Fund |
| Annual Return | ~9% | 8.75-9.75% | Low | Variable | ~10–11% | 9.5–10.5% |
| Tax Rebate | ৳75,000 | ৳18,000 | ৳10,00,000 | ৳10,00,000 | ৳75,000 | ৳75,000 |
| Deposit type | One- off | Monthly | Varies | Anytime | One-off | Monthly |
| Risk | Low | Moderate | Moderate | High | Low | Low |
*As NSC, Treasury bill/bonds are tagged in the same category as Govt. Instruments, the combined maximum tax rebate can be achieved is BDT 75,000 from both avenue.
Choosing What Is Right for You
One size doesn’t fit for all! So, this time, let’s not do what everyone else is doing, rather choose the right investment for you for tax rebate!
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