Interest rates for five national savings schemes have been revised for the January–June 2025 period, aligning them with prevailing market rates for the first time in the country. A notification issued by the Internal Resources Division (IRD) of the Ministry of Finance on January 15, 2025, said that the revised rates are effective from January 1, 2025. The schemes affected by this adjustment include the Five-Year Bangladesh Savings Certificate, Three-Monthly Profit-Based Savings Certificate, Pensioner Savings Certificate, Family Savings Certificate and Post Office Savings Bank Term Accounts under the National Savings Scheme. Interim govt vows justice, recovery of stolen money Besides, the interest rates for these savings schemes will now be revised biannually, reflecting changes in the rates of five-year and two-year treasury bonds. Importantly, investors will receive the profit rate prevailing at the time of purchase throughout the entire term of the investment, ensuring consistent returns. To ensure equity for less privileged groups, the investor categories under the National Savings Scheme have been simplified into two new stages: investments of Tk 7.50 lakh or below, and those exceeding Tk 7.50 lakh. As in the past, early encashment will yield profits based on an annual rate applicable at the time of withdrawal. This move is anticipated to benefit marginal investors and encourage greater participation in the National Savings Scheme, according to an IRD press release. New law in the works empowering Bangladesh Bank to transfer bank owners' shares even without their consent Through the scheme, women, retired employees, pensioners, senior citizens and the physically disabled can access enhanced financial and social security. The changes are expected to make the scheme more effective in supporting these groups.

Bangladesh plans to request China to lower loan interest rates, extend repayment terms by 30 years and waive commitment fees to bolster economic cooperation. The issues along with budget support will come up in a big way during Foreign Affairs Adviser Md Touhid Hossain's bilateral visit to China next week. "...all economic issues will come up for discussion. Some issues are very important. Bangladesh's trade and economic relations with China are very important," the adviser said while talking to reporters at the Ministry of Foreign Affairs on Wednesday. Adviser Hossain said they will discuss budgetary support, explore China's assistance, expedite loan disbursement for Bangladeshi projects, and seek a full withdrawal of the commitment fee. A commitment fee in China is a charge made by a lender to a borrower for keeping a line of credit available. Bangladesh needs global support for climate adaptation: France Hossain will pay the visit at the invitation of Chinese Foreign Minister Wang Yi on January 20-24 which is described as “very important first bilateral visit” after the formation of the interim government led by Prof Muhammad Yunus in August last year. The Foreign Adviser said he will leave Dhaka on January 20 (evening) and will return to Dhaka on January 24. He will have engagements on January 21-23. Bangladesh sees Hossain’s maiden bilateral visit to China as a “great opportunity” to further strengthen and deepen the bilateral relations with Beijing giving an outline for the future cooperation. Asked about GDI, the Adviser said there are some issues that will continue to be discussed with a positive approach and noted that Bangladesh’s relationship with China is not just government-specific. The Global Development Initiative (GDI) is a multilateral development initiative proposed by Chinese President Xi Jinping in 2021. Dhaka shares national aspiration for "credible, inclusive" polls with UN The GDI aims to promote global development by addressing challenges such as poverty, climate change, and food insecurity. Asked about a discussion over 5 billion budget support issue initiated during the previous regime, Hossain said that discussion remains in place “This visit is a great opportunity to further strengthen and deepen the bilateral relations between Bangladesh and China,” Spokesperson at the Ministry of Foreign Affairs (MoFA) Mohammad Rafiqul Alam told reporters at a weekly media briefing recently. The ongoing cooperation between Bangladesh and China in key areas, including economic collaboration, trade, and investment, will be reviewed during the visit, according to Spokesperson Alam. Dr Yunus urges quick solution to KEPZ land rights issue The discussions aim to outline the future framework for strengthening bilateral relations. The visit will also focus on fostering cooperation in agriculture, education, infrastructure, renewable energy, and finding sustainable solutions to the Rohingya crisis, he added. At the invitation of Chinese Foreign Minister Wang Yi, Adviser Hossain will engage in discussions on various issues of mutual interest with his Chinese counterpart during this visit. Bangladesh and China are preparing to celebrate the 50th anniversary of their diplomatic relations in 2025. To commemorate this milestone, both countries have initiated several programmes. "This visit marks an auspicious beginning to the golden jubilee celebrations of diplomatic ties between the two nations," Alam said. China is a significant strategic partner of Bangladesh, serving as one of its largest trading and development partners, Alam said. He noted that bilateral relations have evolved into a "Comprehensive Strategic Cooperative Partnership," reflecting their multidimensional collaboration. The annual trade volume between Bangladesh and China stands at approximately $25 billion, though the trade balance is currently unfavorable to Bangladesh. The visit is expected to address trade restructuring and explore ways to boost Chinese investment in various sectors within Bangladesh, Alam remarked. Time to make system transparent, accountable for Bangladesh: Danish Ambassador The Foreign Adviser is scheduled to deliver speeches at the China Institute of International Studies and the Shanghai Institute of International Studies. He will also meet business representatives in Shanghai to promote increased Chinese investment in Bangladesh.      

Bangladesh Bank has fixed the interest rate at minimum 7 per cent on deposits and maximum 11 per cent in lending for non-bank financial institutions (NBFIs) like banks. The central bank issued a notification on Monday in this regard and sent to the top executives of all the NBFIs asking them to effect the instruction from July 1, 2022. The BB notification stated that some NBFIs are providing higher interest rates on deposits along with charging higher interest rates on lending, which is not investment friendly at all. Also read: BB to fix interest rates for NBFIs too “To bring an unified system for NBFIS in deposit collection and lending the central bank set a rational interest system to minimize the cost of fund as well investment,’ the BB notification said. The interest rate/profit will be effective on the deposit and lease or lending since the execution date of the instruction while the interest / profit on earlier collected deposit will be as per the condition. The new rate of interest/ profit will be effective after end of its tenure. Also read: Contactless payment service to be available for debit, prepaid card users: BB

Small, retired and elderly depositors with banks, who depend on the interest earned on their savings for an income, are increasingly frustrated as the real interest rate on bank deposits has turned negative.The real interest rate is the nominal interest rate adjusted for inflation.In August, the average interest rate on deposits offered by banks was at an all-time low of 4.05 percent which rose slightly to 4.08 percent in September, according to Bangladesh Bank (BB). Read Savings certificates: Finance Minister defends profit lowering  According to the Bangladesh Bureau of Statistics (BBS) the average annual inflation in July was 5.36 per cent. In August, the average annual inflation was 5.54 percent and in September, the annual average inflation was 5.59 percent.When the average interest rate on deposits is lower than the rate of inflation in an economy, the real interest rate is said to be negative, since a person's income from savings is eroded by the rise in prices. It is the same principle that applies when an employee's earnings are annually incremented in line with the rate of inflation, so that his or her real income is not declining. READ: Interest rates on Agri credits, pre-shipment loans further reduced Dr. ABM Mirza Azizul Islam, former caretaker government adviser on Finance, told UNB that retired and senior citizens are facing the brunt of negative interest rates as their real income from savings has declined due to the interest rate they earn on their savings has fallen below the inflation rate.He suggests taking initiatives to curb inflation rate to give a little relief for the people who depend on the interest earned from their deposits.The government can emphasize creating effective bond markets. In developed countries, people prefer investing in the bond market instead of depositing money in banks, Mirza Azizul said. Read Saving vs. Investing Money: Know the Pros and Cons The BB fixed the interest rate on deposits and loans in single digits in April 2020. The interest rate on deposits was fixed later in July of that year at 6 percent, but in reality the banks are offering an interest rate (on deposits) below 6 percent to as low as 4 percent after deducting various charges.Former BB governor Dr. Salehuddin Ahmed said that small depositors have been suffering after the fixing of the interest rate.“The poor and middle class save a small portion of earnings as deposits at the banks, considering the interest as a safe form of earning. But when the interest rate is so low that it drops below the inflation rate, the value of their money is effectively declining. As a result, public savings habits will decline,” he added. READ: Lebanese central bank slashes interest rates amid crisisThe economists said that depositors may instead divert their savings to more risky non-banking channels - such as the stock market or bond market. As per the central bank instruction, in determining the rate of interest or profit in a particular month, one has to take into account the rate of inflation three months before of that month.The BB issued a circular in August 2021 on interest rates. It stated that the interest on term deposits cannot be lower than the three-month average inflation rate. Even then, the average interest rate on deposits offered by banks is much lower than inflation. Read Budget deficit: Savings certificates, non-bank sources to be tapped for one-third of domestic financing Although the banks have been asked to implement the directive since the circular was issued, the average interest rate on bank deposits came down to the lowest level by the end of August.The interest rate on deposits in September is to be determined on the basis of June inflation. Last June, the average annual inflation was 5.84 percent.On the other hand, the average interest rate on deposits collected by banks in September was 4.08 percent. But even five years ago, the interest rate was 7.80 percent, while inflation was still in the same range that it is now. Read Bank clients can renew savings tools, get payments against coupons Sharing his own experience, former Managing Director and CEO of Pubali Bank limited Md. Abdul Halim Chowdhury told UNB that he has been suffering the same problem after retirement.“I have no other business, after retiring last year. I kept my savings in a bank, earning only the interest on it, as a result I am suffering to maintain the same standard of living for my family as the interest rates fell ever-lower than the rate of inflation,” he mentioned.He urged the authorities to consider an alternative interest rate on deposits for retired and elderly people, above the rate of inflation, to help them maintain their living standard from the interest earned on deposits, as many of them have no other choice to earn an income. Read IDLC introduces Bangladesh's 1st MFS-based digital savings programme