National Savings profit rates have been revised downward as the Central Directorate of National Savings (CDNS) announced cuts to returns on most National Savings Schemes (NSS), effective January 23, 2026. The move reflects changing economic conditions in Pakistan, including easing inflation and a gradual shift toward lower interest rates.
According to data compiled by Arif Habib Limited, the reduction affects nearly all major saving instruments, making this one of the most significant revisions in recent months. For millions of savers who rely on these schemes for stable and risk-free income, the changes signal a new phase in the country’s savings and investment landscape.
Biggest Cut in Short-Term Savings
Among all instruments, the Short-Term Special Savings Certificates (STSC) faced the steepest reduction. The return was slashed by 110 basis points, bringing the new rate down to 9.58% from the earlier 10.68%. This sharp decline has drawn attention because STSCs are popular among investors seeking short-duration, low-risk returns.
The Defence Saving Certificate also saw a notable reduction, with its profit rate cut by 64 basis points to 10.44%. Similarly, the Regular Income Certificate, widely used by individuals looking for monthly income, experienced a 60bps cut, lowering its return to 9.96% from 10.56%.
These reductions clearly show a broader trend in National Savings profit rates, aligning them more closely with prevailing monetary conditions.
Impact on Pensioners and Welfare Accounts
Schemes designed for pensioners and welfare beneficiaries were not spared. The Pensioners’ Benefit Account, Behbood Savings Certificate, and Shuhada Family Welfare Account all saw their rates reduced by 48 basis points. The new profit rate for these schemes now stands at 12%, down from 12.48%.
Although these accounts still offer relatively higher returns compared to other savings instruments, the reduction may affect fixed-income households that depend heavily on these earnings to meet daily expenses. For many pensioners, even a small cut in returns can have a noticeable impact on monthly cash flows.
The Special Savings Certificate also experienced a reduction, with its rate lowered by 40 basis points to 10.20%. This scheme has traditionally been seen as a balanced option for medium-term savers, but the latest cut further reflects the downward adjustment in National Savings profit rates.
One Exception: Special Saving Account
In contrast to the overall trend, the Special Saving Account stood out as the only instrument to record an increase. Its profit rate was raised by 20 basis points to 10.40%. This makes it one of the few National Savings instruments now offering improved returns after the latest revision.
Analysts believe this selective increase may be aimed at encouraging savings in accounts that offer greater liquidity, as Special Saving Accounts allow easier withdrawals compared to certificate-based products.
Why Were Rates Reduced?
Market participants largely expected the revision, as it aligns with broader macroeconomic developments. Inflation in Pakistan has shown signs of moderation, and key economic indicators have improved compared to previous years. As a result, the overall interest rate environment is gradually easing.
Last month, the Monetary Policy Committee (MPC) of the State Bank of Pakistan surprised markets by cutting the policy rate by 50 basis points to 10.5%. This decision played a crucial role in shaping expectations around savings rates, including National Savings profit rates.
Since National Savings Schemes are closely linked to government borrowing costs and benchmark interest rates, any reduction in the policy rate usually leads to adjustments in NSS returns.
What This Means for Savers
For conservative investors, National Savings Schemes have long been considered a safe and reliable option. However, with declining returns, savers may need to reassess their strategies. While NSS instruments still offer security and government backing, their appeal relative to other investment options may change.
Some investors may explore alternative avenues such as mutual funds, fixed deposits, or Islamic savings products, depending on their risk tolerance. That said, for risk-averse individuals, especially retirees, National Savings will likely remain a preferred choice despite lower returns.
The recent changes also highlight the importance of staying informed about National Savings profit rates, as even small percentage changes can significantly affect long-term income.
Role of National Savings in Pakistan’s Economy
The National Savings Organisation is Pakistan’s largest financial institution, managing a portfolio of over Rs3.4 trillion. With more than 4 million customers and 376 branches nationwide, it plays a critical role in mobilizing domestic savings.
Beyond serving individual savers, the CDNS helps the government finance budgetary deficits and support key development and infrastructure projects. Adjusting National Savings profit rates allows the government to manage its borrowing costs while balancing the interests of savers.
The latest reduction in National Savings profit rates marks an important shift for Pakistan’s savings market. While most schemes now offer lower returns, the changes are in line with improving economic stability and a softer interest rate environment.
For savers, the key takeaway is to review their financial plans and understand how these revised rates affect their income. As the economy evolves, staying updated on National Savings profit rates will remain essential for making informed and secure investment decisions.
