Introduced nearly 28 years ago, the Three-Month Profit-Bearing Savings Certificate remains a popular investment instrument in Bangladesh, offering quarterly profit payments to investors.
Unlike specialised savings schemes such as the Family Savings Certificate, which is primarily restricted to women, and the Pensioner Savings Certificate, which is designed for retirees, the Three-Month Profit-Bearing Savings Certificate is available to all Bangladeshi citizens. Its profit rates are comparable to those offered by the specialised schemes.
Denominations, outlets and tenure
The certificate is available in denominations of Tk1 lakh, Tk2 lakh, Tk5 lakh and Tk10 lakh. Investors can purchase and encash the certificates through District Savings Offices, National Savings Special Bureau offices, commercial banks and post offices.
The scheme has a three-year maturity period. Investors with holdings of up to Tk7.5 lakh receive a profit rate of 11.82 per cent upon completing the full term, while those investing more than Tk7.5 lakh receive 11.77 per cent.
Premature encashment attracts a lower profit rate. If investors have already received excess profit payments before encashing a certificate ahead of maturity, the additional amount is deducted directly from the principal.
Tax rates and adjustments
Under Section 105 of the Income Tax Act 2023, advance income tax is deducted at source from accrued profits.
Investors with a Taxpayer Identification Number (TIN) are subject to a 10 per cent advance tax deduction, while those without a TIN face a 15 per cent deduction.
Following revisions in the latest budget, tax deducted at source from savings certificate profits is no longer treated as a final tax liability. Taxpayers can therefore adjust the advance tax when filing their annual income tax returns.
Eligibility criteria
The scheme is open to individual and institutional investors under specific statutory provisions.
Eligible investors include:
Bangladeshi citizens: Individuals from all classes and professions.
Provident funds: Recognised Provident Funds under Sub-rule (2) of Rule 49 in Part II of the Income Tax Rules 1984, as well as funds operated under the Provident Funds Act 1925 (Act No 19 of 1925).
Agricultural and farm-sector investors: Those earning income from fisheries farms, poultry farms, pelleted poultry feed production, seed production, marketing of locally produced seeds, cattle farms, dairy and dairy product farms, frog production farms, horticulture projects, silkworm rearing farms, mushroom production, and fruit and vine cultivation under Paragraph 34 of Part A of the Sixth Schedule of the Income Tax Ordinance 1984. Certification from the concerned Deputy Commissioner of Taxes is required.
Autism support institutions: Educational or support institutions established for autistic individuals, provided all investment profits are used exclusively to assist autistic individuals and the institution obtains certification from the relevant District Social Services Office.
Destitute and orphan shelters: Registered institutions providing shelter for destitute and orphan children, including orphanages, child families and orphan homes.
Elderly care homes: Registered shelter centres for senior citizens.
Investment ceilings
Investment limits vary according to the investor category.
Individual investors can invest up to Tk30 lakh under a single name and Tk60 lakh under joint names.
Recognised Provident Funds can invest up to 50 per cent of their total fund balance, subject to a maximum limit of Tk50 crore.
Firms can invest up to Tk2 crore, while autism support organisations, registered shelters for destitute and orphan children, and registered elderly care centres can invest up to Tk5 crore.
Key benefits and provisions
The certificate offers several benefits, including quarterly profit payments every three months and the option to nominate one or more beneficiaries.
If the certificate holder dies, the nominee can either encash the certificate immediately or continue receiving quarterly profits until the end of the three-year maturity period.
An automatic reinvestment facility is also available before maturity by contacting the issuing office.
