Bangladesh’s net sales of savings instruments marked a notable recovery in fiscal year 2024–25, with the deficit narrowing to Tk 60.63 billion—significantly improved from the Tk 211.24 billion recorded in FY24, according to data released by the Bangladesh Bank.

Despite the yearly progress, net sales in June 2025 slipped by over Tk 1.69 billion as encashments of higher-yielding instruments continued to outpace new subscriptions.

This was in contrast to May’s figures, when net sales exceeded Tk 15.37 billion. However, the June decline was far milder than the Tk 33.81 billion drop observed in the same month of the previous fiscal year.

For the July-May period of FY25, net sales stood at negative Tk 58.93 billion, a substantial improvement from the Tk 177.42 billion deficit in the corresponding period of FY24. The total outstanding balance of savings certificates declined by around 2.24% year-on-year to Tk 338.49 billion by June 2025.

This recovery comes amid adverse economic conditions marked by high inflation, weak bank profitability, and limited investment avenues. Yet, the outlook for savers remains bleak following recent reductions in yields across all government-backed savings tools.

Effective from July 1, the Finance Division has lowered annual yields on instruments like the five-year savings certificates, three-monthly profit-based tools, and pensioner-focused schemes. Rates now range between 9.72% and 11.83%, down by 28 to 36 basis points in some categories.

The policy move is part of broader efforts to curb public interest expenditure and align with the central bank’s tight monetary stance. The rates will remain in effect until December 2025 and are scheduled for review in January 2026, depending on fiscal and inflationary conditions.

Economists have expressed concern over the timing and scale of the cuts. Dr M Masrur Reaz, chairman and CEO of Policy Exchange Bangladesh, warned that reducing returns at a time of high inflation risks deepening financial stress for pensioners, small savers, and fixed-income households.

“These tools are lifelines,” he said, urging a more cautious borrowing strategy that protects vulnerable groups while macroeconomic conditions remain challenging. He also stressed the need for restructuring savings instruments to preserve their appeal for small investors without undermining fiscal goals.

Without such recalibration, long-term confidence in public savings schemes may erode, he cautioned.