National Savings Schemes

National Savings Schemes (NSS) are the government savings products of Pakistan, sold to the public by the Central Directorate of National Savings (CDNS), an attached department of the Ministry of Finance. They include savings certificates such as Defence Savings Certificates, Special Savings Certificates and Regular Income Certificates; welfare-linked products such as Behbood Savings Certificates, the Pensioners' Benefit Account and the Shuhada Family Welfare Account; ordinary savings accounts; the Sarwa range of Islamic products; and prize bonds. Money placed in them is lent directly to the federal government.

For the government, NSS is a way of borrowing from households rather than from banks or foreign lenders, and the balances form part of Pakistan's domestic debt. Because the instruments are not traded and can usually be cashed early, they sit in the unfunded debt category in official debt statistics, apart from the marketable Market Treasury Bills (MTBs) and Pakistan Investment Bonds (PIBs). Many countries run similar schemes, such as National Savings and Investments in the United Kingdom and National Savings Certificates sold through India's post offices.

Think of the government as a large, well-known family business that needs money for its running costs. Instead of going only to the bank, it opens a counter in town and invites ordinary people to lend it their savings, promising a fixed return. The lender gets a safe place for money and a regular income; the government gets cash without paying a bank in the middle.

The trade-off is like any family loan. The return is set by the borrower and changes from time to time, and the safety comes from the fact that the government is the one promising to pay, not from a bank's deposit insurance.

National savings in Pakistan date back to the early years after independence, and the organisation became an attached department of the Ministry of Finance in 1960, with its present structure set up in 1972. The CDNS runs its own network of National Savings centres across the country, prize bonds are also handled by State Bank of Pakistan offices and some banks, and many products can now be opened online through its digital platform. It does not take deposits on its own account like a bank: it acts as the government's agent and passes the money to the federal budget.

• Defence Savings Certificates. A ten-year certificate where profit builds up and is paid with the principal on maturity, designed for long-term savers.
• Special Savings Certificates and Special Savings Account. Medium-term products that pay profit at set intervals.
• Regular Income Certificates. Certificates that pay profit every month, aimed at people who need an income from their savings.
• Behbood Savings Certificates. Monthly-profit certificates for widows, senior citizens and disabled people, introduced in 2003.
• Pensioners' Benefit Account and Shuhada Family Welfare Account. Monthly-profit accounts for retired government pensioners and for the families of those killed in service.
• Short Term Savings Certificates and the Savings Account. Products for shorter horizons and day-to-day savings.
• Sarwa Islamic products. Term certificates and a savings account structured to follow Islamic finance principles, for savers who avoid riba.
• Prize bonds. Bearer and registered bonds that pay no regular profit; instead, holders enter regular draws for cash prizes.

The Ministry of Finance revises NSS profit rates from time to time, broadly in line with government borrowing costs and the State Bank of Pakistan policy rate, so the return moves with wider interest rates. As an example, the CDNS notice of rates effective 21 October 2026 listed 12.12% a year for Regular Income Certificates and 12.96% for Behbood Savings Certificates, the Pensioners' Benefit Account and the Shuhada account; rates for other products differed by term. Profit is subject to withholding tax, at a higher rate for people who are not on the active taxpayer list than for filers, and Zakat is deducted on some products where it applies. Rates and tax rules change often, so the CDNS website is the reference for current figures.

NSS has long been one of the largest single sources of household-funded government borrowing in Pakistan. Supporters point out that it gives savers who distrust banks, or who live far from a bank branch, a safe, government-backed product, and that the welfare products support widows and pensioners. Critics have raised several concerns:

• Cost. Fixed-rate certificates can lock the government into paying high returns after market rates fall.
• Competition with banks. Generous NSS rates can pull money away from bank deposits and fixed deposits that would otherwise fund private lending.
• Financial crime risk. Bearer prize bonds were hard to trace, which is why the government withdrew the higher-value bearer bonds and moved those denominations to registered prize bonds.

The idea is common worldwide. In the UK, National Savings and Investments (NS&I), which traces its roots to the Post Office Savings Bank of 1861, sells savings products and Premium Bonds that are fully backed by HM Treasury. India sells National Savings Certificates and other small savings schemes through post offices. The United States sells savings bonds directly to the public, a tradition that goes back to the war bonds of the world wars. In each case the state uses a retail product to borrow cheaply and widely while encouraging households to save, alongside ordinary savings deposits at banks and a savings account.

• Central Directorate of National Savings (Pakistan)
• National Savings and Investments (UK)