ISLAMABAD – Thousands of Pakistanis invest their savings in National Savings Schemes to keep their money secure while earning attractive returns. However, due to a lack of awareness about government regulations and investment options, many investors fail to receive the maximum benefits available to them.
According to financial experts and prevailing National Savings rules, investors can legally increase their returns and avoid unnecessary deductions by following a few key strategies.
The first and most important step is choosing welfare-oriented schemes that offer higher benefits. The government has introduced special products such as the Behbood Savings Certificates and the Pensioners’ Benefit Account for senior citizens aged 60 and above, widows, and persons with disabilities.
A key advantage of these schemes is that they are exempt from all taxes and Zakat deductions under existing regulations. Individuals who do not qualify themselves can legally invest through eligible family members, such as parents or spouses, to benefit from these tax-free returns.
The second strategy is becoming an active tax filer by joining the Federal Board of Revenue’s (FBR) Active Taxpayers List. Under current tax laws, filers pay only 15 percent tax on profit earned from savings schemes, while non-filers face deductions ranging from 30 to 35 percent.
Experts say becoming a filer is one of the most effective ways to protect investment income from excessive taxation.
Investors are also advised to select accounts offering the highest available returns. Since profit rates are periodically revised by the Ministry of Finance in line with economic conditions, keeping track of the latest profit rate charts is essential.
For those seeking Shariah-compliant investment options, the Sarwa Islamic Term Account is considered a suitable choice. Meanwhile, investors looking for short-term deposits can opt for Short-Term Savings Certificates, which offer competitive returns on investments for periods of three, six, or twelve months.
Another important factor is avoiding premature withdrawals. Investors holding funds in Regular Income Certificates or other long-term schemes are encouraged to keep their investments until maturity.
Early withdrawals can result in penalties or service charges ranging from 0.5 percent to 2 percent, while withdrawing funds within the first six to twelve months may significantly reduce or even eliminate profit earnings.
Lastly, investors can avoid Zakat deductions by submitting a Zakat exemption declaration form (CZ-50 affidavit) before the first day of Ramadan. This allows eligible account holders to avoid the mandatory 2.5 percent Zakat deduction on applicable savings accounts.
Financial experts stress that awareness of these rules can help investors maximise legal returns while protecting their savings from unnecessary deductions.
