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The government's net borrowing through the national savings instruments more than doubled in the fiscal year (FY) 2020-21 than that of the FY's target, according to the official statistics.
The Department of National Savings (DNS) disclosed recently that the net sales of national savings certificates stood at Tk 419.59 billion in the last FY against a target of Tk 200.00 billion.
The net sales of the instruments were nearly three times higher in the last FY than that of the previous FY's Tk 144.28 billion, data showed.
Officials said the savers have invested more in these savings schemes due to lucrative yield rates.
Many of them even borrowed money from the banks and invested in the instruments as the yield rates were higher than the interest rates on bank loans, said an official at the DNS.
He also pointed out that a significant number of savers had reinvested in savings instruments after maturity of their previous investments which is another reason behind the increased sales in the last FY.
The government sells savings instruments, including four types of savings certificates, with the yield rates up to 11.76 per cent.
In contrast, the banks are providing interest rates on deposits up to 5.50 per cent while charging the lending rates up to 9.0 per cent.
The interest rates vary depending on banks and bank-client relationship, insiders have said. Some banks were offering even 6.0 to 7.0 per cent lending rates, they added.
Talking to the FE, Salma Begum, who invested in the Family Savings Certificate, said she had no alternative but to buy a savings certificate as other sectors, including banks, were not attractive for investing her money.
"A substantial part of my family expenses comes from the proceeds of the savings certificates," she said.
Another saver, Farid Ahmed, said he could not start any small venture due to the Covid-19 pandemic. So, investing in savings certificates was the better option for him to earn something in such a difficult time.
When contacted, officials said that the DNS has no plan at this moment to cut the yield rates on savings tools, especially on savings certificates.
The government is considering the financial security of small savers, who are struggling hard to survive because of the pandemic, they said.
Meanwhile, the DNS in 2019 started taking necessary preparations to automate its services which are expected to complete by 2024. Then the clients are expected to get online services.
Currently, the taxpayers identification number (TIN), and national identification (NID) number are mandatory for purchasing the savings certificates.
Apart from the savings schemes, the DNS sells different types of bonds to local and expatriate Bangladeshis.
Around 20 million investors are involved in this sector, DNS officials said.