ISLAMABAD: The Central Directorate of National Savings (CDNS) has reduced profit rates on short-term savings certificates (STSCs), effective December 2024, due to lower inflation in the country.
Introduced in 2012, it caters to the short-term financing needs of investors and offers three-month, six-month and one-year maturity options. These certificates are available to Pakistani nationals and overseas Pakistanis, allow investments starting from INR 10,000 with no upper limit and can be pledged as security.
Under the revised rates, the three-month maturity certificate now offers a profit rate of 12.76 per cent, yielding Rs 3,190 on an investment of Rs 100,000, down from the previous 14.32 per cent, which yielded Rs 3,580.
The profit rate for six-month maturity certificates is now 12.74 per cent, saving Rs 6,370 on the same investment, compared to the previous rate of 13.46 per cent, which yielded Rs 6,730.
One-year maturity certificates now offer a yield of Rs 12,380 at a rate of 12.38 per cent, reduced from previous levels.
Taxes on profits from these certificates remain linked to the investor’s tax status. Individuals on the Active Taxpayer List (ATL) are subject to a 15 percent withholding tax, while non-filers are subject to a 30 percent tax, regardless of investment history or profit amount.
On December 11, the federal government announced a significant reduction in profit rates for national savings programmes. The profit rate for savings accounts fell from 16% to 13.5%, a decrease of 250 basis points, in line with broader interest rate reviews for various programmes.
Profit rates for ordinary income certificates and defense savings certificates have also been adjusted. Ordinary income certificates now offer 12.1 per cent, a decrease of 10 basis points, while adjustments have been made to profit rates for other schemes, such as the Savings Account, Sarwa Al Islami Account and Islamic Savings Account. The Islamic Savings Account profit rate decreased by 72 basis points and now stands at 10.44 per cent.