Government further reduces savings bond profits in New Year

Staff Correspondent

At the beginning of the new year, there was disappointing news for savings bond investors. The government has reduced the interest rate on savings bonds by 1.5 percent.

Savings certificates purchased from January 1, 2026, will earn an average return of around 10.5 percent at the end of their term, compared to around 12 percent so far. The new rate will apply to savings certificates purchased from January 1 to June 30 for the next six months. However, investors in savings certificates purchased before that will earn the same interest rate as previously announced. Savings certificate investors have been disappointed by this news.

Bangladesh Bank issued a notification in this regard on January 1.

Although the Awami League government had kept the interest rate on savings certificates unchanged for a long time, the Yunus government has been adjusting it with the interest rates on government treasury bills and bonds since January last year. Currently, the profit on savings certificates is determined based on the average auction interest rate of the last six months of five- and two-year treasury bonds.

Savings bond yields have also been steadily declining as interest rates on Treasury bills and bonds have fallen in recent times. Earlier, interest rates were also slightly reduced for the July-December period.

Currently, there are four types of savings certificates and a government savings scheme called Post Office Fixed Deposit in the country. Each scheme offers different interest rates for investments up to and including 7.5 lakh taka. An individual can buy savings certificates up to a maximum of 50 lakh taka.

In addition to savings certificates, there are opportunities to invest in general accounts of Post Office Savings Bank and three types of bonds for expatriates. The interest rates on these schemes have been kept unchanged.

According to the new notification, those who invest Tk 7.5 lakh or less in a five-year Bangladesh Savings Certificate will get a profit of 10.44 percent at the end of the term, which was 11.83 percent earlier. The profit for investments of more than Tk 7.5 lakh for the same term has decreased to 10.41 percent.

The profit on investments up to 7.5 lakh taka in three-monthly profit-based savings certificates with a tenure of three years has been fixed at 10.48 percent, whereas it was 11.82 percent earlier. The profit on investments above this will be 10.43 percent, whereas it was 11.77 percent earlier.

The profit on investments of up to 7.5 lakh taka in a five-year pensioner savings certificate has been reduced to 10.59 percent, which was earlier 11.98 percent. The profit on investments of more than this in the same scheme will stand at 10.41 percent, which was earlier 11.80 percent.

In addition, the profit on investments of up to 7.5 lakh taka in a five-year family savings certificate will be 10.54 percent, which was previously 11.93 percent. The profit on investments of more than 7.5 lakh taka has been fixed at 10.41 percent, whereas it was previously 11.80 percent.

The interest rate on three-year post office fixed deposits has also been reduced in a similar manner. Investments up to 7.5 lakh taka will earn a profit of 10.48 percent and investments above that amount will earn a profit of 10.43 percent. Earlier, the profit rates in these cases were 11.82 percent and 11.77 percent respectively.

The notification further states that if the savings certificate or deposit is redeemed before the stipulated tenure, profit will be paid at a comparatively lower rate at the end of the first, second, third and fourth years. In schemes where profit is paid regularly during the tenure, the principal amount will be adjusted at the stipulated rate at the end of the tenure.