Government Plans Digital Prize Bonds as Alternative to Bearer Bonds

ISLAMABAD: The Finance Division has directed the Central Directorate of National Savings (CDNS) to introduce digital prize bonds, promoting a paperless system while reducing printing and distribution costs.

The State Bank of Pakistan subsidiary CDNS announced in a statement that “Soon CDNS will offer Digital Prize Bonds as well and the prize money will be directly credited to customers’ accounts.”

“This will reduce expenditure on stationary and printing. It will also create ease for customers’ as there will not be a need to keep the prize bonds in a safe custody as required currently with paper based prize bonds.”

This initiative aims to replace bearer prize bonds, ensuring greater security by registering the bonds in the buyer’s name. This reduces the risk of theft, damage, or loss, offering a safer and more reliable investment option.

According to a statement from the finance ministry, the first offers would consist of digital reward bonds with denominations of 500, 1,000, 5,000, and 10,000 rupees.

The National Savings Mobile App and other channels recognised by CDNS would allow qualified individuals to purchase digital prize bonds.

A CDNS savings account or a connected bank account is required to pay for purchases. You may redeem these digital prize bonds through the mobile app and have your rewards deposited into the same bank or savings account that you used to buy them.

The Finance Division will determine the frequency of the digital prize bond drawings, but they are typically held every three months.

Digital prize bond buyers have the option to designate a recipient when making their purchase, and they can always edit or remove their selection afterward. The succession certificate specifies who would get the capital and any prize money in the case of the investor’s death. The buyer’s nominee would get the money if the total sum is less than or equal to Rs500,000.