How bank profit is calculated
Savings accounts usually calculate profit on the monthly average or minimum balance and pay it monthly or six-monthly. Term deposit receipts (TDRs) and certificates pay a fixed rate for a fixed period, with profit paid monthly, quarterly or at maturity.
Simple profit = deposit × rate × months ÷ 12 ÷ 100.
Compound (reinvested) = deposit × (1 + rate ÷ 1200)months − deposit.
Tax on bank profit
Banks deduct withholding tax under Section 151 when profit is credited. For individuals with profit up to Rs 5 million a year, the rate is 15% for active filers and 30% for non-filers, and it is generally the final tax on that profit. Zakat may also be deducted on 1 Ramadan from savings accounts of Muslim account holders unless a valid exemption declaration is on file.
Monthly profit at 11% (examples)
| Deposit | Gross / month | Net (filer) | Net (non-filer) |
|---|---|---|---|
| Rs 100,000 | Rs 917 | Rs 779 | Rs 642 |
| Rs 500,000 | Rs 4,583 | Rs 3,896 | Rs 3,208 |
| Rs 1,000,000 | Rs 9,167 | Rs 7,792 | Rs 6,417 |
| Rs 2,500,000 | Rs 22,917 | Rs 19,479 | Rs 16,042 |
| Rs 5,000,000 | Rs 45,833 | Rs 38,958 | Rs 32,083 |
The gap between filer and non-filer net profit pays for the effort of filing a return many times over.
What rate can you expect?
Bank deposit rates follow the State Bank policy rate (11.5% in late 2026). The minimum profit rate on conventional savings accounts is linked by SBP to the policy rate, while term deposits and special high-balance accounts pay more or less depending on the bank and amount. Islamic banks pay an expected profit rate under Mudarabah that is declared monthly. Compare a few banks before locking in a TDR, and check whether early encashment loses profit.
Bank deposit or National Savings?
National Savings schemes such as Behbood, Pensioners' Benefit Account and Regular Income Certificates often pay more than ordinary savings accounts, with the same 15% / 30% tax. Banks are more convenient and liquid. Compare both with the National Savings profit calculator.
Inflation check
Real return = profit rate after tax − inflation. At 11% gross, a filer earns about 9.35% after tax. If inflation is near 8%, the real return is roughly 1.3%. For long-term goals, consider also government securities, mutual funds or the Roshan Digital account options if you are an overseas Pakistani.
Frequently asked questions
How much profit will I get on Rs 1,000,000 in a bank?
At 11% a year, gross profit is about Rs 9,167 a month; after 15% filer tax about Rs 7,792.
What is the tax on bank profit in Pakistan?
15% for active filers and 30% for non-filers, deducted at source, for individuals with profit up to Rs 5 million a year.
Is bank profit tax final?
For individuals within the threshold it is generally treated as final tax, but you still declare it in your return.
Is Zakat deducted from bank accounts?
Yes, on 1 Ramadan from savings accounts of Muslims above the Nisab, unless an exemption declaration (CZ-50) is submitted.
Which is better: bank TDR or National Savings?
National Savings often pays higher rates; banks are more flexible. Compare current rates and your liquidity needs.