Govt slashes National Savings profit rates as yields decline

• Special Saving Certificate rate now 10.9% after 30bps reduction.
• Pensioners Benefit and Behbood Certificates yield 13.44% after revision.
• Islamic saving rates lowered by 10bps amid declining market yields.
  

The Central Directorate of National Savings (CDNS) has revised profit rates downward across various government-backed savings schemes, with reductions reaching up to 100 basis points amid a broader decline in market interest rates, The News reported.

As per figures shared by Topline Securities on Wednesday, the steepest cut was in the basic savings account rate, which fell by 100 basis points to 9.5%. 

The rate for the Special Saving Certificate was lowered by 30 basis points to 10.9%, while the Defence Savings Certificate saw a 21 basis point reduction, bringing its return to 11.91%.

Rates on other popular instruments, including the Regular Income Certificate and Pensioners Benefit Account, were trimmed by 18 and 24 basis points, respectively. The Regular Income Certificate now yields 11.52%, and the Pensioners Benefit Account 13.44%. 

The government also reduced returns on the Behbood Savings Certificate and the Shuhada Family Welfare Account — both reserved for senior citizens and families of martyrs — by 24 basis points each to 13.44%. 

Meanwhile, profit rates on Islamic products such as the Sarwa Islamic Term Account and Sarwa Islamic Saving Account were lowered by 10 basis points to 10.34%.

The CDNS is Pakistan’s largest financial institution, managing assets exceeding Rs3.4 trillion and serving over four million customers through a nationwide network of 376 branches across the country, administered by 12 Regional Directorates. It plays a vital role in helping the government finance its budgetary deficits and support key infrastructure projects.

These changes in profit returns come after the SBP’s MPC decision to cut its key interest rate by 100 basis points to 11% earlier this month, surpassing expectations, in response to an improved inflation outlook and to protect the country’s economy from steep US tariffs and geopolitical tensions.

Pakistan’s headline inflation dropped to just 0.3% year-on-year (YoY) in April 2025 — a historic low — compared to 17.3% in the same month last year and 0.7% in March, according to data released by the Pakistan Bureau of Statistics (PBS). The sharp decline was primarily driven by broad-based reductions in food and energy prices.

On a month-on-month (MoM) basis, the Consumer Price Index (CPI) fell by 0.8% in April, reversing a 0.9% increase seen in March.