Good news for pensioners: Interest on savings certificates will be credited monthly
The decisions were made during a meeting yesterday, chaired by Abdur Rahman Khan, secretary of the Internal Resources Division and chairman of the National Board of Revenue
The government is set to provide monthly interest on pensioner savings certificates, which will be credited directly to investors' accounts at the end of each month. It has also decided to raise the interest rates for all types of savings certificates.
Additionally, the government will now ensure that investments in 11 savings schemes, including Wage Earner Development Bonds, US Dollar Premium Bonds, and US Dollar Investment Bonds, managed by the National Savings Directorate, are automatically reinvested upon maturity.
The decisions were made during a meeting yesterday, chaired by Abdur Rahman Khan, secretary of the Internal Resources Division and chairman of the National Board of Revenue.
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According to sources, the decisions have been made to address the shortfall in government revenue and the foreign exchange reserve crisis.
Until now, investors in pensioner savings certificates received interest or profit every three months.
On the other hand, the government returns the principal amount of savings bond investments to investors' accounts at the end of the term.
In recent years, the government has tightened investment in savings bonds due to pressure from the IMF and the high interest costs involved.
Now, with declining revenue and the need to reduce borrowing from banks, the government is once again turning to savings bonds for financing.
In FY23, the government reduced its net borrowing from savings certificates. In this fiscal year, net borrowing from savings certificates was negative Tk3,347 crore, compared to the previous fiscal year.
According to Bangladesh Bank data, for FY24, the initial borrowing target was set at Tk18,000 crore, but in the revised budget, it was lowered to a negative Tk7,310 crore.
However, in the FY25 budget, the government has set a new target to borrow a net amount of Tk15,400 crore from this sector.
Due to the ongoing dollar crisis, some banks are reportedly struggling to pay investors in Wage Earner Development Bonds, US Dollar Premium Bonds, and US Dollar Investment Bonds with interest in foreign currency.
After the meeting at the Internal Resources Division, Abdur Rahman Khan told TBS, "Due to the increase in bank deposit interest rates, the interest rates for all types of savings certificates will be raised. A committee is currently working under the leadership of the Finance Division to address this."
"Based on the committee's recommendations, the interest rates for savings certificates will be adjusted accordingly," he added.
Abdur Rahman Khan said the National Savings Directorate currently manages 11 savings schemes, where investors receive their principal amount at the end of the term. Those who wish to reinvest must do so manually.
"We have decided that, going forward, if investors do not withdraw their principal at the end of the term, it will be automatically reinvested," he said.
He also mentioned that the investments in Wage Earner Development Bonds, US Dollar Premium Bonds, and US Dollar Investment Bonds will also be automatically reinvested upon maturity.
Abdur Rahman Khan stated that, until now, Bangladeshi mariners, pilots, and cabin crews have not had the opportunity to invest in Wage Earner Development Bonds. The meeting has decided to extend this investment opportunity to them.
An official from the Ministry of Finance, who attended the meeting, said that discussions included the redetermination of interest rates for various savings certificates, including pensioners' savings certificates.
Additionally, the preparation of a dashboard for savings bond investors and the revision of commission rates on the sale of savings bonds were also addressed, the official added.
