Dhaka, Bangladesh (BBN) – Net sales of national savings certificates jumped by more than 76 per cent in the first quarter (Q1) of the ongoing fiscal year (FY)-2016-17 mainly due to higher interest on the savings tools than that of the banks’ deposit products.
The net sales of the savings instruments rose to BDT 116.50 billion in the July-September period of FY 17 from BDT 66.12 billion in same period of the last fiscal, according to the official figures, released on Thursday.
“People rush for the savings instruments continued as the interest rate for the savings certificates and bonds was still much higher than that of the banks’ deposit products,” an official of the Directorate of National Savings (DNS) explained.
He also said the rising trend of sales of the savings tools is still continuing despite the interest rates on savings instruments cut by the government on May 23, 2015.
In the budget for FY17, the government set an annual borrowing target of BDT 196.10 billion from the national savings certificates.
Currently, four types of savings certificates — Five Years Sanchayapatra, Three Monthly Sanchayapatra, Pensioner Sanchayapatra and Poribar Sanchayapatra — are now on the money market for public subscription.
Talking to BBN, a senior banker said savers, particularly small ones, are encouraged to invest in the risk-free instruments mainly due to higher returns.
“We’re facing unhealthy competition in collecting fresh deposits from depositors because of higher yields on the savings instruments,” the banker said to explain the rethink of government policy on mobilizing deficit finances.
Currently, average interest rate on deposit, offered by the commercial banks, is around 6.50 per cent, while the interest rate for the savings tools is between 11.04 per cent and 12.00 per cent.