Tuesday, 31 January, 2023
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Monthly returns proposed for savings tools

NSD to reform savings certificates to attract more investments

Monthly returns proposed for savings tools

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The National Savings Directorate (NSD) has initiated reforms to its current savings tools to provide monthly returns on some schemes, along with an increase in the investment limit to attract more pensioners and institutions. 

NSD has sent a proposal to the Internal Resources Division (IRD) of the finance ministry in this regard.

Currently, profits are only paid monthly on family savings certificates, while profits are paid quarterly on quarterly profit-based savings certificates, pensioners' savings certificates, and five-year Bangladesh saving certificates.

NSD has proposed increasing the pensioners' scheme's buying limit to Tk 10 million from Tk 5 million, and curtailing the age limit to 50 years for male family scheme buyers instead of 65 years, sources reported.

Aside from attracting more male buyers for the family scheme, the existing Bangladesh savings certificates are being reshuffled to attract more institutional investment.

A proposal has been submitted to the IRD to raise the ceiling for pension scheme purchases and reduce the age limit for family scheme male buyers. A proposal was also made to offer profits on those tools on a monthly basis,” said NSD’s acting director general Md Shah Alam.  

The government and the ministry will take a decision with regard to this and the decision will be effective after the proposal is approved, he informed.         The age limit for male investors in NSD's family plan is 65 years, which bars pensioners from investing since their retirement age is 59 years. Employees in the private sector also face the same problem.

NSD argued that many people die before the government's 65-year age limit.

Government employees used to receive scant retirement benefits when the ceiling was imposed. However, the situation has changed since two pay scales were announced in 2009 and 2015, an NSD official explained.

Currently, even a second class official receives more than Tk 5 million in gratuity and when the provided fund benefit is added to it, the total amount of pension benefits exceeds Tk 10 million.

“These pensioners cannot fully invest their benefits in savings tools due to the low investment ceiling,” he said.

Only investors in family schemes receive monthly interest from the four types of government savings tools currently available. According to NSD officials, monthly interest payments are more beneficial to investors than once every three months.

Furthermore, duplicate Bangladesh saving certificates can be issued manually, and IRD has provided its opinion regarding this to the finance division in response to their request.

The NSD director general discussed the issue with the IRD secretary and NBR chairman before sending the proposal.