Returns on Defence Savings Certificates, Regular Income Certificates and Islamic savings products decline as easing interest rates reshape National Savings returns.
ISLAMABAD: Profit rates on almost all products offered under Pakistan’s National Savings Schemes (NSS) declined during FY2025-26, reflecting the easing interest rate environment, according to the Economic Survey of Pakistan 2025-26.
The survey showed that returns on Defence Savings Certificates, Regular Income Certificates, Special Savings Certificates, Savings Accounts and Islamic savings products were revised downward during the fiscal year, while the return on National Prize Bonds remained unchanged.
Profit rates revised downward
The government reduced profit rates on most National Savings products with effect from January 23, 2026, while revisions to certain instruments took place on separate dates.
Revised profit rates on National Savings products
• Defence Savings Certificates: Reduced from 12.15% to 10.44% (10-year maturity, taxable).
• Special Savings Certificates/Accounts: Reduced from an average 11.13% to 9.57% (3-year maturity, taxable).
• Regular Income Certificates: Reduced from 11.74% to 9.96% (5-year maturity, taxable).
• Savings Account: Reduced from 10.50% to 9.00% (running account, taxable).
• Pensioners’ Benefit Account: Reduced from 13.68% to 12.00% (10-year maturity, tax-exempt).
• Bahbood Savings Certificates: Reduced from 13.68% to 12.00% (10-year maturity, tax-exempt).
• Shuhada Family Welfare Account: Reduced from 13.68% to 12.00% (10-year maturity, tax-exempt).
• National Prize Bonds (Bearer): Unchanged at 10.00% (perpetual, taxable).
• Premium Prize Bonds (Registered): Reduced from 13.80% to 10.84% (perpetual, taxable).
Short-term savings certificates also record lower returns
Returns on Short Term Savings Certificates (STSC) also declined across all available maturities.
The revised rates are:
• 3-month STSC: Reduced from 11.12% to 9.64%.
• 6-month STSC: Reduced from 11.08% to 9.56%.
• 12-month STSC: Reduced from 10.96% to 9.58%.
Islamic savings schemes post lower profit rates
The downward trend also extended to SARWA Islamic Savings Schemes, with all products recording lower returns during FY2025-26.
The revised rates include:
• SISA: Reduced from 10.44% to 9.00%.
• SITA – 1 Year: Reduced from 10.44% to 9.00%.
• SITA – 3 Years: Reduced from 10.92% to 9.16%.
• SITA – 5 Years: Reduced from 11.39% to 9.36%.
Tax treatment remains unchanged
According to the Economic Survey of Pakistan 2025-26, the tax treatment of National Savings products remained unchanged despite the reduction in profit rates.
The following schemes continued to enjoy tax-exempt status:
• Pensioners’ Benefit Account.
• Bahbood Savings Certificates.
• Shuhada Family Welfare Account.
All other National Savings products remained subject to the applicable tax provisions.
Lower interest rates reduce investor returns
The Economic Survey indicates that the reduction in profit rates across the National Savings portfolio was consistent with the broader decline in market interest rates during FY2025-26.
While lower returns affected investors across most savings instruments, the National Savings Schemes continued to offer a diverse range of products tailored to pensioners, widows, families of martyrs and general investors, providing secure government-backed investment options despite the softer interest rate environment.