Sales of savings tools nosedive in July

Net sales of the state-owned savings instruments dropped drastically in July, the first month of the current fiscal year 2021-22, according to official data.

The net sales of national savings certificates fell by 43.25 per cent year-on-year in July, 2021.

According to National Savings Directorate data, the net sales of the government-run savings tools in July came down to Tk 2,104 crore, down from Tk 3,708 crore in the same month of the previous fiscal year.

It is a normal trend in July’s sales of saving instruments while the sales of saving certificates have increased in the last fiscal year, said the NSD officials.

In the last (2020-21) fiscal year, the net sales of savings instruments stood at Tk 41,959.54 crore, up by 191 per cent from the previous 2019-20 fiscal year due to the lower yield on bank deposits than saving instruments.

Now, most banks are collecting deposits at between four to five percent interest rate while the government is offering up to 11.3 per cent interest against the national savings tools.

However, the government cut the interest rates on savings certificates and wage-earner bonds by 1 to 3 percentage points in September.

The sales of saving tools may fall further in the upcoming month due to the government’s latest move, the officials also added.

The government fixed a target of borrowing Tk 32,000 crore against the savings instruments for the FY’ 2021-22.

In the FY ‘2019-20 budget, the government had imposed a five per cent tax at source on the interest income from NSCs worth up to Tk five lakh. It also levied a 10 per cent tax at source for investment in schemes above Tk five lakh.

According to the government’s new rules, those who are investing in savings instruments, need to submit their electronic taxpayer’s identification number (e-TIN) and also the national identity number (NID). If the amount is more than Tk one lakh, they must pay the money through a bank cheque.