Net sales of savings certificates fall 73% in October

The effect of lowering interest rates on savings certificates has already begun to surface, as its net sales declined by 73% in a single month.

According to the latest statistics of the Directorate of National Savings (DNS), total sales of savings certificates in October this year was Tk8,723 crore.

Of this, Tk7,956 crore was paid as principal and profit.

After paying the original amount, the net amount of the remaining money is Tk766 crore.

However, net sales in September was Tk2,825 crore, hence October's figure was a 72.87% drop.

In September of the current fiscal year, sales of the savings tools amounted to Tk8,722 crore, which itself is a year-on-year decline of Tk2,627 crore, or 23.14%.

Asked about the sudden collapse in the sale of savings certificates and its impact, Ahsan H Mansur, executive director of Policy Research Institute of Bangladesh, told Dhaka Tribune: “In September, the government implemented new interest rates on savings certificates. Now there are limits and restrictions on investing in savings certificates. I think the new reduced rates were behind the low sales figures.”

According to DNS data, total savings certificates sales in the first four months of this fiscal year was Tk35,328 crore, 28.34% of the fiscal target.

In the current fiscal year FY22, the government borrowing target from net savings certificates sales is Tk32,000 crore.

The government has set a target of more than Tk1 lakh crore for savings instruments sales this year.

According to the September 21, circular, the new interest rates were applicable for investments over Tk15 lakh for both individual and institutional investors.

For investments below Tk15 lakh, the investors will get the existing interest rate, which is 11.28%.

However, the interest rate will be 10.30% instead of 11.28% for five years savings certificates over Tk15 lakh.

If it goes above Tk30 lakh, the interest rate will be further reduced to 9%.

In the case of wage earners development bond, the new interest rate will be 10.27% instead of 11.20% if the amount crosses Tk15 lakh.

For Tk30 lakh and above, the interest rate will be 9.33% and above Tk50 lakh, 8.4%.

Earlier, on May 23, 2015, the government reduced the profit rate of all types of savings certificates by an average of 2%.

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