Behbood Savings Certificate rate raised to 12.96pc: new national savings rates

The government has raised profit rates on several national savings schemes, including those for pensioners, senior citizens and families of martyrs, with the new rates taking effect from October 21, Dawn reported.

The revised schedule was issued by the Central Directorate of National Savings (CDNS). It is good news for the many retired people and families who rely on these schemes for a fixed monthly income.

Pensioners and families of martyrs

The profit rate on Behbood Savings Certificates, Pensioners’ Benefit Accounts and Shuhada’s Family Welfare Accounts has gone up to 12.96 per cent from 12.72pc.

For every Rs100,000 invested in these schemes, the monthly profit rises to Rs1,080 from Rs1,060. Over a full year, that is an extra Rs240 for every Rs100,000 invested, before tax.

Regular income and special certificates

• Regular Income Certificates: The rate rises to 12.12pc from 11.76pc. That means a monthly return of Rs1,010 on Rs100,000, up from Rs980.
• Special Savings Certificates: The rate rises to 12pc from 11.6pc for the first five profit payments. Investors will get Rs6,000 on Rs100,000 every six months, and the sixth and final payment will be Rs6,400, at a rate of 12.8pc.

Defence Savings Certificates

Cumulative returns on Defence Savings Certificates have also been raised across different maturities:

Held for	New cumulative return	Previous
6 years	88pc	86pc
7 years	113pc	109pc
8 years	142pc	136pc
9 years	176pc	168pc
10 years	215pc	205pc

Short-term and Sharia-compliant schemes

The rate on three-month Short Term Savings Certificates has increased to 11.12pc from 10.80pc, while the new schedule offers up to 11.72pc for longer maturities.

Returns on Sharia-compliant schemes have also gone up. Sarwa Islamic Term Accounts now pay between 11.84pc and 12.12pc depending on maturity, and the rate on Sarwa Islamic Savings Accounts has risen to 11.84pc from 11.33pc.

The profit rate on ordinary Savings Accounts has been kept at 10pc a year.

What it means for a Rs1 million investment

Using the new published rates, here is how monthly or periodic profit changes on a larger investment, before tax:

• Behbood, pensioners’ or Shuhada account, Rs1 million: Rs10,800 a month, up from Rs10,600.
• Regular Income Certificates, Rs1 million: Rs10,100 a month, up from Rs9,800.
• Special Savings Certificates, Rs1 million: Rs60,000 every six months for the first five payments, and Rs64,000 for the sixth.
• Defence Savings Certificates, Rs100,000 held for 10 years: a cumulative return of 215pc, against 205pc before.

Tax and Zakat

According to the official schedule, profits on national savings schemes are subject to withholding tax of 15pc for filers and 30pc for non-filers. Zakat is deducted where the rules require it.

That means a non-filer keeps noticeably less of each payment. On Rs1,080 of monthly profit from a Behbood certificate, for example, a filer would have Rs162 withheld and a non-filer Rs324, based on the published tax rates.

The changes apply to the schedule issued by CDNS from October 21. Investors holding existing certificates should check with their National Savings centre how the new rates apply to their accounts.