Female investors flock for FSCs
Tuesday, 14 December 2010
Arafat Ara
The Family Saving Certificate (FSC) has emerged as the top selling investment instrument offered by the government, with its attractive interest rates and tax-free facility wooing droves of female investors.
Some 149,282 women have bought the female-only FSCs in the first four months after it was launched on June 23 this year, according to the figures by the National Savings Directorate.
Sale of FSCs has topped 5.21 billion in October, up from Tk 3.99 billion a month earlier, said a senior NSD official, adding during the period sale of other saving instruments has declined markedly.
"The FSC is now the highest selling saving instrument, outperforming nine other existing saving certificates," he said.
Officials said the FSC, which has five different maturities, offers the best bargain for the savers, as an investor gets a fixed interest rate of 11.04 per cent. Among the other certificates, the maximum interest rate is 10 per cent.
They said investors' interest in other saving instruments has plunged in recent months after the government imposed a 10 per cent advance income tax on profit-gain from all but pensioners' savings certificate.
The net sales of three-year savings certificates registered a negative growth at Tk 2.30 billion in October due to the higher rate of encashment - mostly due to diversion of fund to stock market -- than that of fresh investment, said the official.
"Investment in the stock market has become attractive because of the bourses' recent bull run. That's why many investors are dumping their saving certificates for the lure of company shares," he said.
Sale of five-year saving certificates marked a negative growth of Tk 170 million in September because of higher encashment, officials said.
The depressing sale of other saving instruments mean the government would unlikely to meet its target to raise Tk 80 billion in the current fiscal year through the sale of the NSD certificates, they said.
"Only rays of hope come from the sale of FSCs," said an official, adding the instrument was designed as a social safety tool and to encourage women to save.
Under the scheme, a female investor can invest a maximum Tk 3.0 million.
For a five-year-term FSC, monthly interest rate is Tk 92 for certificates valued at Tk 10,000, the rate is Tk 184 interest for Tk 20,000, Tk 460 for Tk 50,000, Tk 920 for Tk 0.1 million, Tk 1,840 for Tk 0.2 million, Tk 4,600 for Tk 0.5 million and Tk 9,200 for Tk 1.0 million.
The FSC has five different maturities -- from one to five years -- with interest rates ranging from 8.0 per cent to 11.04 per cent. But, an investor won't get any interest if she sells the certificate before one-year.
The Family Saving Certificate (FSC) has emerged as the top selling investment instrument offered by the government, with its attractive interest rates and tax-free facility wooing droves of female investors.
Some 149,282 women have bought the female-only FSCs in the first four months after it was launched on June 23 this year, according to the figures by the National Savings Directorate.
Sale of FSCs has topped 5.21 billion in October, up from Tk 3.99 billion a month earlier, said a senior NSD official, adding during the period sale of other saving instruments has declined markedly.
"The FSC is now the highest selling saving instrument, outperforming nine other existing saving certificates," he said.
Officials said the FSC, which has five different maturities, offers the best bargain for the savers, as an investor gets a fixed interest rate of 11.04 per cent. Among the other certificates, the maximum interest rate is 10 per cent.
They said investors' interest in other saving instruments has plunged in recent months after the government imposed a 10 per cent advance income tax on profit-gain from all but pensioners' savings certificate.
The net sales of three-year savings certificates registered a negative growth at Tk 2.30 billion in October due to the higher rate of encashment - mostly due to diversion of fund to stock market -- than that of fresh investment, said the official.
"Investment in the stock market has become attractive because of the bourses' recent bull run. That's why many investors are dumping their saving certificates for the lure of company shares," he said.
Sale of five-year saving certificates marked a negative growth of Tk 170 million in September because of higher encashment, officials said.
The depressing sale of other saving instruments mean the government would unlikely to meet its target to raise Tk 80 billion in the current fiscal year through the sale of the NSD certificates, they said.
"Only rays of hope come from the sale of FSCs," said an official, adding the instrument was designed as a social safety tool and to encourage women to save.
Under the scheme, a female investor can invest a maximum Tk 3.0 million.
For a five-year-term FSC, monthly interest rate is Tk 92 for certificates valued at Tk 10,000, the rate is Tk 184 interest for Tk 20,000, Tk 460 for Tk 50,000, Tk 920 for Tk 0.1 million, Tk 1,840 for Tk 0.2 million, Tk 4,600 for Tk 0.5 million and Tk 9,200 for Tk 1.0 million.
The FSC has five different maturities -- from one to five years -- with interest rates ranging from 8.0 per cent to 11.04 per cent. But, an investor won't get any interest if she sells the certificate before one-year.