bdnews24.com :
Monira Yusuf of old Dhaka had bought ‘Paribar Sanchayapatra’, a savings instrument, worth Tk 0.5 million five years back with the money her non-resident Bangladeshi husband had sent from Saudi Arabia.
She wants to renew the investment in Paribar Sanchayapatra, literally family savings certificate, on maturity, as the profit earned from the instruments meets a part of her family expenditure.
Monira is not alone in reinvesting the money in savings instruments, which involves no risk of the money being lost.
According to the central bank, it is receiving more than a hundred applications everyday for savings certificate renewal on maturity. Fresh investments in the sector are also on the rise.
Economists attribute this investor preference for saving certificates to interest rate cuts by banks on deposits and the certificate’s zero-risk factor.
According to information at the Directorate of National Savings (DNS), certificates worth Tk 243.09 billion were sold in the 2013-14 financial year, ending on Jun 30.
During the period, the net investment stood at Tk 117.07 billion as the investors withdrew Tk 126.02 billion in profit and capital.
The net investment was 15 times more than Tk 7.73 billion of the previous FY, when investors bought certificates valued at Tk 233.27 billion and withdrew Tk 225.54 billion in profit and capital.
Withdrawal of money from savings certificates declined by 44.12 percent in 2013-14 FY from that of the previous FY.
Bangladesh Institute of Development Studies (BIDS) Research Director Zaid Bakht told bdnews24.com: “More and more new investors are feeling inclined to invest in savings certificates as they are risk-free and safe. And those whose certificates are maturing are reinvesting the money. That’s why net investment has increased.”
A long queue of savings certificate-holders coming to withdraw the monthly interest was seen at the Bangladesh Bank on Thursday.
An officer at the bank said they were experiencing similar rush every day.
Monira Yusuf, who came to the central bank to renew her investment, told bdnews24.com: “The profit of the savings certificates meets my family expenditure, including that of my children’s education. That’s why I applied for renewal of the investment for another five years.”
Another woman, Shakila Akter, said she bought savings certificates as they yielded greater interest than bank deposits.
The Paribar Sanchayapatra was introduced in 1996, during the Awami League government. Though subsequent BNP government stopped the service, the Awami League relaunched it 2009 after assuming office.
The government is now offering 13 percent profit on savings certificates.
