DEFENCE SAVINGS CERTIFICATE [Profit Rates]

he Government of Pakistan introduced Defence Savings Certificate scheme in the year 1966. The scheme has specifically been designed to meet the future requirements of the depositors. This is 10 years' maturity scheme with built in feature of automatic reinvestment after the maturity. These certificates are available in the denominations of  Rs.500, Rs.1000, Rs.5,000, Rs.10,000, Rs.50,000, Rs.100,000, Rs.500,000 and Rs.1,000,000/=.

Who Can Invest .

These certificates can be purchased by a single adult, a minor, two adults in their joint names with the options of payable to the holders jointly (Joint-A ) or payable to either (Joint-B). An adult can also purchase these certificates on behalf of a single minor, two minors jointly or himself/herself and a minor jointly.Institutions may also invest individual funds such as pension, gratuity, superannuation, contributory provident funds and trusts etc.

How To Purchase.

These certificates can be purchased from any National Savings Centre (NSC), Pakistan Post Offices (PPO), Authorized branches of Scheduled Banks and State Bank of Pakistan (SBP) by filling in a prescribed form called SC-1, which is available at all the above offices of issue free of cost.    A copy of the Computerized National Identity Card (CNIC) or in case of a foreign national, a copy of the Passport is required to be attached with the application form. To download application form in editable Adobe Acrobat format, please click here.

Mode of Deposit.These certificates can be purchased by depositing cash at the issuing office or by presenting a cheque. The certificates shall immediately be issued on receipt of cash. However, in case of deposit through cheque the certificates shall be issued from the date of realization of the cheque after receipt of the clearance advice.

What Is The Investment Limit.The minimum investment limit is Rs.500/-, however, there is no maximum limit of investment in this scheme.
What About Redemption.

These certificates are encashable at par any time after the date of purchase. However, no profit is payable if encashment is made before completion of one year.

Further, certificates purchased on or after 15-11-2010 can not be automatically reinvested. However, other better options are available for investment in National Savings Schemes.

What is the return.

In this scheme the profit is paid on maturity or encashment for completed years. Every Rs.100,000/- will become Rs.106,000/-, Rs.113,000/-, Rs.121,000/-, Rs.131,000/-, Rs.144,000/-, Rs.161,000/-, Rs.182,000/-, Rs.208,000/-, Rs.242,000/- and Rs.285,000/- on completion of 1, 2, 3, 4, 5, 6, 7, 8, 9 and 10 years, respectively. These rates are effective from 12th October, 2012. The average compound rate of return on maturity presently works to 11.04% p.a. For any other time period rates table is also available on website.
 

Tax & Zakat Status.

At present, the profit earned is exempt from withholding tax, if the total investment in the scheme by the investor(s) does not exceed Rs.150,000/-.  However, withholding tax @ 10% is deductible at source on the profit(s) earned if the total investment exceeds Rs.150,000/- by the investor(s). The Zakat is collected at source as per rules.