Profit rates on Pakistan government securities decline by up to 150bps

The profit rates on Pakistan government securities, commonly known as National Savings Certificates, have been reduced by up to 150 basis points (bps) due to the decline in yields of Pakistan Investment Bonds.

Data posted on the National Savings website showed that the rates for Savings Accounts, Serwa Islamic Saving Accounts and Short-Term Savings Certificates have decreased by 150bps, 150bps and 134bps, respectively.

The rate for Savings Accounts has dropped from 20.50% to 19.00%, while the rate for the Serwa Islamic Saving Accounts has decreased from 20.50% to 19.00%.

The new rate for Short-Term Savings Certificates is now 17.90%, down from the previous 19.24%.

These rate adjustments are effective from August 7, while the rates for other schemes remain unchanged.

A person investing PKR 100,000 in a Savings Account now earns an annual return of PKR 19,000, reduced from the previous PKR 20,500. Similarly, in a Serwa Islamic Saving Account, the annual return for Short Term Savings Certificates has decreased to PKR 17,900 from PKR 19,240. These revised rates apply only to new investments.

As of May, the savings scheme stock stood at PKR 2.71 trillion, which is categorized as unfunded debt by the State Bank of Pakistan. This amount represents 5.9% of the total central government domestic debt.