Net investment in savings certificates turns positive after 3-month decline

Net investment in national savings certificates (Sanchayapatra) returned to positive territory in April and May after remaining negative for three consecutive months, providing some relief to the government’s budget financing in the closing months of fiscal year 2025-26.

According to the latest Bangladesh Bank data, the government’s net borrowing from savings certificates stood at around Tk 805 crore during the first 11 months (July-May) of FY2025-26.

The recovery was driven by stronger sales and lower redemptions in April and May, reversing the negative trend recorded earlier in the fiscal year.
Economists said renewed public interest in savings certificates stemmed from uncertainty in the banking sector and concerns over the safety of deposits, according to UNB report. 

Towfiqul Islam Khan, Additional Research Director at the Centre for Policy Dialogue (CPD), told UNB that small investors, middle-income households and retirees continue to regard government savings schemes as one of the safest investment options.

“Persistent inflation has also encouraged people to prefer fixed-income instruments over riskier investment avenues,” he said.

He explained that net investment is calculated by deducting repayments of matured or prematurely encashed certificates from total sales. The resulting balance is used by the government to help finance its budget deficit.

In the original FY2025-26 budget, the government targeted Tk 12,500 crore in net borrowing from savings certificates.

However, the target was later revised down to Tk 11,500 crore following weak sales in the earlier months.

Data from the National Savings Directorate show that total sales reached Tk 6,464 crore in May, while encashments amounted to Tk 5,230 crore, resulting in a net investment of Tk 1,234 crore.

In April, sales stood at Tk 7,973 crore against redemptions of Tk 5,712 crore, generating a net investment of Tk 2,260 crore.

The strong performance in the two months offset losses incurred during the previous three months.

During the first nine months (July-March) of FY2025-26, net investment fell  into negative territory by Tk 2,690 crore.

Overall, net investment reached around Tk 803 crore during the first 11 months of FY2025-26, a marked improvement from the same period of FY2024-25, when net investment stood at negative Tk 5,893 crore as repayments significantly exceeded fresh sales.

Monthly data show positive net investment in July (Tk 1,293 crore), August (Tk 279 crore), September (Tk 373 crore), October (Tk 424 crore), December (Tk 384 crore), April (Tk 2,260 crore) and May (Tk 1,234 crore).

Net investment, however, remained negative in November (Tk 293 crore), January (Tk 1,851 crore), February (Tk 1,165 crore) and March (Tk 2,135 crore).

Market analysts said sales of savings certificates have  slowed in recent years due to lower profit rates, mandatory Taxpayer Identification Number (TIN) requirements, stricter investment rules and attractive returns offered by treasury bills, government bonds and bank deposits.