Savings certificate interest rates will rise

The interim government will increase interest rates on several savings certificates to more than 12 percent as it seeks to provide some relief to the fixed-income group pressured by high inflation.

Currently, the interest rates given to the four savings certificates of the National Savings Department ranged between 11.04 percent and 11.76 percent.

The savings instruments are: the five-year Bangladesh Savings Certificate, the quarterly profit-bearing Sanchayapatra, the five-year Family Savings Certificate and the five-year Pensioner Savings Certificate.

The government will introduce the new system for savings certificates that will be linked to the interest rates on government treasury bonds.

The new system will come into force from January 1, a Finance Ministry official said, adding that official notification would come soon.

The principal advisor approved the new system and the relevant documents were sent to the Internal Resources Division of the Ministry of Finance for issuing the notification.

Under the proposal, interest rates on savings certificates would be set following the weighted average interest rates on five- and two-year Treasury bonds.

Interest rates on Treasury bonds will be reviewed every six months and interest rates on savings certificates will be re-fixed.

In addition, if interest rates on savings certificates are re-fixed, a premium of at most 50 basis points will be added to the weighted average interest rates on treasury bonds.

Currently there are three types of interest limits for the four savings certificates.

Under the new system, the five-year Bangladesh Savings Certificate interest rate will be 12.4 per cent for up to Tk 7.5 lakh. For savings of Tk 7.5 lakh or more, the interest rate will be 12.37 per cent.

At present, a beneficiary gets 11.28 per cent interest for up to Tk 15 lakh after the maturity period, 10.30 per cent for between Tk 15 lakh and Tk 30 lakh, and 9.3 per cent for more than Tk 30 lakh.

In case of profit-bearing quarterly Sanchayapatra, the new interest rate will be 12.3 per cent to 12.25 per cent. Under the current system, interest rates range from 11.04 to 9 percent.

In the case of the family savings certificate, the new interest rates will be 12.5 to 12.37 percent, while the existing interest rates are 11.5 to 9.5 percent.

Furthermore, in the new system the interest rates for the pension plan will be 12.55 to 12.37 percent. Currently, it is 11.76 to 9.75 percent.

Meanwhile, the interest rates of the other savings instruments (the employee bond, the investment bond in US dollars and the premium bond in US dollars) will remain unchanged.