Rupee Accounts, Which banks offer the best monthly rate of return?

Ive decided to settle in Karachi and I wanted to open up a rupee account and was wondering what banks have the best rate of return and what the minimum required balance is ?

Someone was telling me if you put 1 crore in a rupee account you get 1 lakh back a month just in interest!!!

This sounds too good to be true... Any recommendations/suggestions on which bank and type of bank acct to open??? How is this monthly interest rate even possible???

No bank is going to offer you 12% interest a year... and sadly considering the inflation in Pakistan, you would still be losing money at that interest rate.

compared to a 1% rate of return of US savings banks monthly and then you end up paying tax on that, pakistan still seems like a better option to me even at 5%-6%.

Can someone explain to me what this mahana izaafa account is? Is this what Im inquiring about or is this something else...? thxxx

http://www.standardchartered.com/pk/personal/accounts-deposits/en/mahana-izaafa.html

Regular Income Certificate (RIC) Profit Rates :

On Rs.100,000/-. you can get Rs.900/- every month after deduction of the tax.

So you may calculate profit on your investment at 9%.

No bank in Pakistan will give you more profit compared to National Savings Pakistan.

One more sincere suggestion that don't go for the local banks in Pakistan because they are big frauds. Only National Savings and General Post Office of Pakistan are government guaranteed in original sense.

For more details you may log on to:

http://www.savings.gov.pk

Thanks so much!!

so if at 100,000 I can get 900 that means if I invest 5,000,000 I can get 45,000 a month...hmmm

I'll look further into the National Savings Bank. The only thing which seems a bit intimidating is that the certificate is for 4 years and there is an early cashing in penalty: " if encashed before completion of one year from the date of issue - @ 2.00% of the face value".

Would that still be worth it if one cashes in early at 5,000,000? My math is really bad... that would be 100,000 correct? and then what about the interest rate? that wouldn't be touched? that's something I'll have to talk to the bank rep about I guess... You never know when you have an emergency and need to get your money out.

Also in Pakistan do any banks actually offer an interest bearing DOLLAR account? If so, which banks and at what rate? thxxxx

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The only thing which seems a bit intimidating is that the certificate is for 4 years and there is an early cashing in penalty: " if encashed before completion of one year from the date of issue - @ 2.00% of the face value".
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No the certificate is for 10 years. Penality apply’s only if you encash your certificate within 4 years.

Lets say you invested 100,000 and you encash the whole amount in first year than you will have to pay Rs.2000 as a penalty.

[quote=", post:, topic:"]
Would that still be worth it if one cashes in early at 5,000,000? My math is really bad… that would be 100,000 correct?
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yes

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and then what about the interest rate? that wouldn’t be touched? that’s something I’ll have to talk to the bank rep about I guess… You never know when you have an emergency and need to get your money out.
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I would recommend you to don’t take out profit on first two months and ultimately you will always have the required amount for paying the penalty.

And moreover don’t take all the certificates with one cash book. Get certificates of Rs.50000 or Rs.100000 denomination so that when you want money than you have an edge to encash different certificates.

[quote=", post:, topic:"]
Also in Pakistan do any banks actually offer an interest bearing DOLLAR account? If so, which banks and at what rate? thxxxx
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Foreign currency accounts rate are not good compared to national savings. You may check it yourself.

I think you should consider investing in mutual funds, which offer much better rates of return than commercial deposits, provide immediate (almost) liquidity, and if you choose the fund wisely, there is very low risk involved. Of course, if you choose to invest in mutual funds having stocks as underlying assets, then your portfolio will contain significant downside risk. However, if for example, you choose a cash optimizer, or dynamic cash fund, it contains 95% (or close to that percent) government securities like T-Bills and PIBs, which are risk-free securities, and remaining are invested in short-term inter-bank deposits or other cash securities, so there is very little downside risk. These funds are nowadays giving returns in the range of 10%-12% pa, which would translate to near 100,000 per month for 10,000,000 investment. Also, if you choose not to encash your income within a year, you get your 10% withholding tax waived in case of mutual funds, which otherwise is levied on return from bank deposits, TDs, CDs or NSS instruments. Further, these funds are valued mark-to-market on daily basis, so you get daily return instead of a monthly, quarterly, or bi-annual coupon.

The fact is, very few people know about these mutual funds and the advantages these offer compared to other saving instruments.

The other alternative, in my opinion would be, to invest in a National Saving Scheme, which would provide you with monthly or quarterly coupon to meet your regular cash-flow needs. This option is viable only, if you are not concerned with liquidity of your funds, as these tie-up the funds for longer time periods, and penalties apply if you withdraw your funds earlier than maturity.

A hard earned money can never be invested in stocks.

^ Probably you misunderstood; I never advised to invest in stocks or any fund that has stocks as underlying assets. I myself have little faith in Pakistan's stock markets.

However, as a general rule of thumb in modern investment management or portfolio management, it is always advisable to include equity and other alternative assets in your overall portfolio (depending on your investment horizon, risk tolerance, liquidity and income needs, and some other factors), as these assets offer great upside potential (but in long-run only). So one can choose to include these assets only if investment horizon is at least 10+ years.

To get an advice on proper asset allocation, one can always seek services of a professional investment adviser.

Thanks for the help!!!!

By the way, what is the going foreign currency account rate? Just curious...

Must be close to zero I guess, as the Fed Funds Rate itself is close to zero (in the range of 10-25 basis points).

I would like to second Imran. National Saving Certificates are

the safest bet. The best deal with them is the Behbood Cert.

which is for senior citizens (older parents would qualify). An

year ago, they were giving them out on 16.8% interest rate.

One caveat, there is an upper limit of 30 lakh/person these

days, which wasn't there before. Some senior citizens get

around that by opening accounts in different NSC branches.

Bank of Punjab was offering 19% returns about 2 years ago.

Later, it turned out to be involved in a major financial scandal.

About stocks in Pakistan, I know of several retired uncles who

were lured by the notion of making a "quick buck" and had to

sell their house/cars to go live in flats, thanks to the vagaries

of the market. People in the know, readily admit to flagrant

violations; insider tradings, manipulations by a half-a-dozen big

fish who control it all. In short, it's rigged.

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Sheikh 'Safe Bet' Chilli

I'm surprised no one raised the issue of a fast depreciating Pakistan Rupee. People are trying to move their money out of Pakistan since the country and its currency provide little to no financial security. Inflation and depreciating exchange rates will eat away at your savings significantly faster than what the interest will earn you. By only looking at the interest rates at face value, you are being very short sighted and you will live to regret it.

From what I gather from your posts, it seems you are/have lived in the US permanently. I would recommend you keep your savings there and only keep in Pakistan what you must.

Some might argue that I'm being anti-Pakistan by advising people to keep their money out of the country. So I'll just give a preemptive reply and say that we should be giving the OP sincere advice in view of ground realities. He/she should make an informed decision keeping the facts in mind.

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Now National Savings Pakistan are giving 14.64% profit on per annum basis for Behbood Certificates.

Now the senior citizens who are 60+ can get Rs.1220 on the investment of Rs.100000.

But one bad thing remains ther i.e an upper limit of 30 lakh/person is not removed.

And for regular income certificates they are giving 12.36% profit on per annum basis. Just like the behbood scheme, the investor can get his profit on monhly basis.

In this scheme there is no limit of age or investment. So, every month you can get Rs.930 on the investment of Rs.100000. (Note: I have subtracted the 10% tax also).

[quote=", post:, topic:"]

An year ago, they were giving them out on 16.8% interest rate. One caveat, there is an upper limit of 30 lakh/person these days, which wasn’t there before. Some senior citizens get around that by opening accounts in different NSC branches.
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Oh common dude how is it possible? I think they check it through computerised system.

If they can’t even protect that slab than why did they put it?

[quote=", post:, topic:"]

I’m surprised no one raised the issue of a fast depreciating Pakistan Rupee. People are trying to move their money out of Pakistan since the country and its currency provide little to no financial security. Inflation and depreciating exchange rates will eat away at your savings significantly faster than what the interest will earn you. By only looking at the interest rates at face value, you are being very short sighted and you will live to regret it.
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Any alternate way to invest money?

^ As far as I understand, the OP just wants a savings account and not a way to invest money. Proper investing is a fairly involved business, even if you're looking at rather passive investments like real estate. You need to know what you're doing which requires knowledge and research, and even after that there is a big risk factor.

If you just want to park your cash in a bank, then I would advise against keeping it in Pakistan.

Imran, you are right. What was I thinking. How could it be

possible. It's insane to even think it. Insane I tell you! ;0)

Sah is right about depreciation and inflation slowly cutting

into your capital. But I believe sairaB has declared that she

is moving back to Karachi and exploring investment opportu-

nities that will be secure and lucrative. She is not looking to

'park' her money (like those Pak bigwigs with their ill-gotten loot),

but rather putting it to work where she can get steady income

from it.

In the US (I don't know enough about Canada), the interest

rates have historically been anemic. The stock market and real

estate over there has been in the dumps since 2000 and giants

in business are crumbling one, after the other. Pretty much the

same for western Europe and closer to us, Dubai. So from an

investment point, things are not rosy abroad and it doesn't look

like it's going to change anytime soon.

Yes, if you want to stow away (hide) booty/loot then Switzerland

is the beloved place. Or you can buy T-Bills in the US. It will be

there, when you need to get out of town, in a hurry.

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Sheikh '60 Million' Chilli

If you are looking for a bank account with ready access to cash whenever you want to withdraw it then i'll recommend:

Bank AL Habib - Monthly Saver Account

8% interest - paid monthly - on balances over Rs. 100,000 - with free ATM Card (Don't know if they give cheque book but i think they do)

Standard Chartered - Easy Saver Account

7.25% interest - paid monthly - no minimum balance requirement - VISA Card with Rs. 25,000 limit - However they dont give Cheque Book - (Online transfers to other local banks are supported - for free)

Both banks are reputable and with good consumer service. (IMHO)