The Central Directorate of National Savings (CDNS) has announced a reduction in profit rates on various saving schemes, following the State Bank of Pakistan’s (SBP) decision to lower the key policy rate.
This latest adjustment by CDNS is aimed at aligning savings returns with the overall monetary policy stance of the country.
Effective from February 25, 2025, CDNS has revised the rates across multiple savings instruments. According to brokerage firm Arif Habib Limited, the Bahbood Savings Certificates have seen a 10 basis points (bps) reduction, bringing the new rate down to 13.58% from 13.68%. Similarly, the return on Pensioners Benefit Account (PBA) has been lowered by 10bps to 13.58% from 13.68%, impacting retirees relying on CDNS for stable earnings.
Defence Saving Certificates (DSC), another popular scheme offered by CDNS, will now provide a return of 12.14%, following a slight decline of 1bps from 12.15%. Meanwhile, Special Savings Certificates have undergone a 20bps reduction, with the new return set at 11%. The Short-Term Savings Certificates (STSC) have faced a sharper decline of 33bps, reducing their return to 10.81% from the previous 11.14%.
In addition to these changes, CDNS has revised the rates on Islamic savings products as well. Both the Sarwa Islamic Savings Account and the Sarwa Islamic Term Account will now offer a 9.74% return, following a 16bps reduction. Similarly, the Shuhada Family Welfare Account (SFWA) has been impacted, with its rate dropping by 10bps to 13.58%. Special Savings Accounts have also been affected, with returns decreasing by 20bps to 11%.
The decision to slash rates comes in the wake of the State Bank of Pakistan’s Monetary Policy Committee (MPC) reducing the key policy rate by 1%, bringing it down to 12%. This marks the sixth consecutive rate cut since June 2024, when the policy rate stood at a high of 22%.
According to the MPC, inflation is projected to decline further in January before experiencing a slight uptick in the following months. Despite the ongoing reductions, core inflation remains elevated, prompting continued caution in monetary policy decisions. CDNS remains a key institution in the country’s financial landscape, providing vital savings options to millions of Pakistanis while adjusting its policies in response to macroeconomic shifts.