Savings certificate interest rates to be increased

The current interest rates for the four savings certificates under the Department of National Savings range between 11.04 percent and 11.76 percent. These instruments include the five-year Bangladesh Savings Certificate, the three-monthly profit-bearing Sanchayapatra, the five-year Family Savings Certificate, and the five-year Pensioners' Savings Certificate.

Starting January 1, the government will implement a new system for determining savings certificate interest rates, linking them to the interest rates of treasury bonds. According to a finance ministry official, an official notification will be issued soon following approval by the chief adviser. The Internal Resources Division of the finance ministry is preparing the necessary documents for the announcement.

Under the proposed system, savings certificate interest rates will be based on the weighted average interest rates of five-year and two-year treasury bonds. These rates will be reviewed every six months, and savings certificate rates will be adjusted accordingly. Additionally, a premium of up to 50 basis points will be added to the weighted average treasury bond rates during the adjustment process.

Currently, the four savings certificates have three tiers of interest ceilings. Under the new system:

• The five-year Bangladesh Savings Certificate will offer 12.4 percent interest for amounts up to Tk 7.5 lakh and 12.37 percent for amounts above Tk 7.5 lakh. At present, rates range from 9.3 to 11.28 percent depending on the investment amount.
• The three-monthly profit-bearing Sanchayapatra will have rates between 12.3 and 12.25 percent, up from the current range of 9 to 11.04 percent.
• The Family Savings Certificate will offer rates of 12.5 to 12.37 percent, compared to the current 9.5 to 11.5 percent.
• The Pensioners' Savings Certificate will have rates between 12.55 and 12.37 percent, up from the existing 9.75 to 11.76 percent.

However, interest rates for other savings instruments, such as the Wage Earners Bond, US Dollar Investment Bond, and US Dollar Premium Bond, will remain unchanged.