The interim government is set to increase the interest rates against various savings certificates to upwards of 12 percent as it looks to provide some relief to the fixed income group squeezed by the elevated inflation.

At present, the interest rates provided against the four savings certificates under the Department of National Savings ranged from 11.04 percent to 11.76 percent.

The savings instruments are: the five-year Bangladesh savings certificate, the three monthly profit-bearing Sanchayapatra, the five-year family savings certificate and the five-year pensioners' savings certificate.

The government will introduce the new system for the savings certificates which will be linked to the government's treasury bond interest rates.

The new system will be effective from January 1, said a finance ministry official, adding that the official notification would come soon.

The chief adviser has approved the new system and the relevant documents have been sent to the Internal Resources Division of the finance ministry for issuing the notification.

According to the proposal, the interest rates against savings certificates will be fixed following the weighted average interest rates of the five-year and two-year treasury bonds.

The interest rates against the treasury bonds will be reviewed every six months and the savings certificates' interest rates will be re-fixed.

Besides, in case of re-fixing the interest rates against savings certificates, a premium of at most 50 basis points will be added to the weighted average treasury bond interest rates.

There are three types of interest ceilings for the four savings certificates at present.

As per the new system, the interest rate against the five-year Bangladesh savings certificate will be 12.4 percent for up to Tk 7.5 lakh. For savings of Tk 7.5 lakh and above, the interest rate will be 12.37 percent.

At present, a beneficiary gets 11.28 percent interest for up to Tk 15 lakh after the maturity period, 10.30 percent for between Tk 15 lakh and Tk 30 lakh, and 9.3 percent for more than Tk 30 lakh.

In the case of the three monthly profit-bearing Sanchayapatra, the new interest rate will be 12.3 percent to 12.25 percent. Under the existing system, the interest rates are 11.04 to 9 percent.

In the case of the family savings certificate, the new interest rates will be from 12.5 to 12.37 percent while the existing interest rates are 11.5 to 9.5 percent.

Also, the interest rates against the pensioners' scheme will be 12.55 to 12.37 percent under the new system. At present, it is 11.76 to 9.75 percent.

Meanwhile, interest rates against the other savings instruments -- the wage earners bond, the US dollar investment bond and the US dollar premium bond -- will remain unchanged.