Originally posted in The Business Standard on 27 October 2026
Savings certificate sales on the rise, likely to exceed budget target as bank deposit rates fall
Net sales stood at Tk2,463 crore in July-August, according to data from the Department of National Savings
Highlights:
- Savings certificate net sales reached Tk2,463 crore in July-August.
- Sales could exceed the annual government target by Tk6,279 crore.
- Falling bank deposit rates are driving savers towards savings certificates.
- Savings certificates offer 10.41%-10.59% returns, versus bank deposits around 7.50%.
- Retirees and middle-class families seek safer investments and steady income.
- Rising sales increase government borrowing and future interest-payment burdens.
Savings certificate sales are rising as falling bank deposit rates push ordinary savers towards an investment that they see as safer and offers relatively higher returns, with net sales in July-August already reaching nearly 29% of the government’s target for the entire year.
Net sales stood at Tk2,463 crore in July-August, according to data from the Department of National Savings. If the current pace continues, net sales could reach about Tk14,779 crore by the end of the fiscal 2026-27, which is around Tk6,279 crore more than the government’s budget target of Tk8,500 crore.
The department informed the finance ministry of the trend in a report on 17 October, saying a review of savings certificate sales and encashments up to August showed an increase in sales.
The projection, however, is based on the average monthly net sales recorded during the first two months, it said. The final figure could change depending on sales and encashments in the remaining months of the financial year.
The increase is also evident in gross sales.
The National Savings Department said Tk18,576 crore worth of savings certificates were sold in July and August, against a government target of Tk11,957 crore for the period. Sales were therefore 55.36% higher than the target.
For the full financial year, the government has set a target of selling Tk71,743 crore worth of savings certificates. The department said in its report that, if the sales trend seen in the first two months continues, total sales could reach Tk1,11,459 crore during the year.
Falling bank deposit rates
The rise comes as banks have been cutting deposit rates, widening the gap between returns on savings certificates and conventional bank deposits.
Savings certificates currently offer returns ranging from 10.41% to 10.59%, depending on the amount invested and the maturity period. By comparison, several large commercial banks have reduced the interest rate on one-year fixed deposits to around 7.50%.
Sources at Bangladesh Bank said several banks had cut deposit rates for the second time in two months, with some reducing rates by between 50 and 100 basis points.
Although bank deposits are increasing, weak demand for private-sector credit has reduced banks’ need to offer higher rates to attract new deposits. This has made savings certificates more attractive to savers seeking higher returns without taking on the risks associated with other investments.
Fahmida Khatun, distinguished fellow at the Centre for Policy Dialogue, said the banking sector had been experiencing excess liquidity for a long time while private-sector credit growth remained weak.
“In such a situation, deposit rates in the banking sector are falling. At the same time, people are turning to savings certificates in search of relatively higher interest and safe investment over the long term,” she told TBS.
She said the rise in savings certificate investment would increase the government’s borrowing as well as its interest payments, putting further pressure on budget management.
“A large portion of the government’s budget is already being spent on debt repayment and interest payments,” she said. “The growing sales of savings certificates could add further to this burden.”
Fahmida also noted that ordinary people had few safe and attractive investment options in the country.
“Investment in the stock market carries risks because of its volatility. On the other hand, the bond market has yet to become sufficiently attractive to ordinary investors. As a result, people are relying on savings certificates in the hope of earning relatively safe and fixed returns,” she said.
The reliance on certificates
With the government keeping savings certificate rates unchanged through December and bank deposit rates falling, savings certificates have become increasingly attractive to savers.
The difference is particularly significant for people who rely on their savings to meet household expenses amid inflation.
Retired employees, pensioners, middle-class families and small savers are among the main investors in savings certificates, many of whom depend on regular returns. They often invest their retirement savings, proceeds from the sale of land or other assets, or money accumulated over many years.
For these investors, the key attractions are relatively higher returns, a steady income over a fixed period and the security of a government-backed investment.
Rising sales of savings certificates, however, present a mixed picture for the government.
On the one hand, the instruments provide the government with a source of domestic borrowing from outside the banking system. On the other, their relatively high returns mean that the government will face higher interest-payment obligations in the future.
The pace of investment in savings certificates will therefore have a direct bearing on the government’s borrowing needs and debt-servicing costs for the remainder of the financial year.
