Short Term Savings Certificates rates for January 2025

ISLAMABAD: The Central Directorate of National Savings (CDNS) has decided to not change the profit rates on Short Term Savings Certificates, effective January 2025. This adjustment comes in response to the decline in inflation across the country.

The federal government introduced Short Term Savings Certificates (STSCs) in 2012 to cater to the short-term funding needs of investors. These certificates offer maturity options of three months, six months, and one year.

The program is accessible to both Pakistani nationals and Overseas Pakistanis, allowing investments starting from a minimum of Rs10,000 with no upper limit. Investors also have the flexibility to pledge these Short Term Savings Certificates as security.

Short Term Savings Certificates rates for January 2025:

Under the revised rates, the profit for a three-month maturity certificate has been set at 12.76 percent, yielding Rs3,190 on an investment of Rs100,000, compared to the previous rate of 14.32 percent, which yielded Rs3,580.

For six-month maturity certificates, the new profit rate is still 12.74 percent, amounting to Rs6,370 for every Rs100,000 invested, a decrease from the earlier rate of 13.46 percent, which provided Rs6,730. The one-year maturity certificates now offer a profit rate of 12.38 percent, resulting in a return of Rs12,380 on the same investment amount.

The taxation on profits from these certificates depends on the investor’s tax status. Individuals listed in the Active Taxpayer List (ATL) are subject to a withholding tax rate of 15 percent on the yield, while non-filers, not appearing in the ATL, are taxed at a higher rate of 30 percent. These rates are applied uniformly regardless of the investment date or profit amount.

The adjustment in profit rates reflects the government’s efforts to align financial instruments with the prevailing economic conditions, offering revised incentives to investors while managing fiscal dynamics effectively.

On December 11, The federal government announced a significant decrease in the profit rates for National Savings schemes.

According to the National Savings Department, the profit rate for savings accounts has been reduced from 16pc to 13.5pc, representing a decline of 250 basis points. This adjustment aligns with the overall revision of interest rates for certain savings schemes.

In addition to the changes in savings account rates, the profit rates for regular income certificates and defense savings certificates have also been lowered. The profit rate for regular income certificates has decreased by 10 basis points, now standing at 12.1pc.