In a move to manage national borrowing, the government has slashed interest rates on all types of National Savings Certificates (NSCs) for the second half of 2025, setting the ceiling at 12 percent and the floor at 9.74 percent.
The Department of National Savings issued a notification on Tuesday (July 1), detailing these revised rates.
Previously, the lowest interest rate for these certificates was 10.13 percent, with the highest reaching 12.55 percent.
Under the new structure, the government will now review and revise NSC interest rates every six months, a policy initiated with the last announcement in January.
Despite these changes, the interest rate applicable at the time of purchase will remain fixed for investors until their respective schemes mature.
While most savings certificates are affected, four specific schemes will maintain their existing interest rates: the Wage Earner Development Bond, US Dollar Premium Bond, US Dollar Investment Bond, and Post Office Savings Bank General Account.
Impact on Popular Schemes
The revised rates show a clear intent to lower the cost of borrowing for the government. For instance, the highest interest rate on a five-year pensioner savings certificate for an investment up to Tk 750,000 is now 11.98 percent, down from the previous 12.55 percent. An investment of the same amount for one year in this scheme will now yield 9.84 percent, a decrease from 10.23 percent.
Similarly, the five-year Bangladesh Savings Certificate for investments up to Tk 750,000 will offer 9.74 percent if withdrawn after one year. For investments exceeding Tk 750,000, the rate for the same period will be 9.72 percent.
Family Savings Certificates, one of the nation's most popular savings instruments, have also seen reductions. An investment up to Tk 750,000 for five years will now fetch an interest rate of 11.93 percent, down from 12.50 percent.
If withdrawn after a year, the rate drops to 9.81 percent from the prior 10.20 percent. For investments above Tk 750,000 in this scheme, the minimum interest rate is 10.11 percent, and the maximum is 12.37 percent. Interest rates for profit-based savings certificates, family savings certificates, and post office savings accounts are also determined every three months.
Government's Financial Strategy
These adjustments come as the government prepares to finance a portion of its Tk 1.26 lakh crore budget deficit for the 2025-26 fiscal year from domestic sources, representing 2.0 percent of the GDP. Of this, the government aims to raise Tk 12500 crore from savings certificates.
The move follows a challenging period for the government's borrowing from NSCs.
Over the last 10 months of the 2024-25 fiscal year, the government had to repay more than it borrowed from savings certificates, incurring net interest payments of Tk 7431 crore.
