Deposit Accounts in Dubai, UAE

Arguably the most popular financial saving tool – a Fixed Deposit (FD), needs no introduction. Also known as a term deposit or a bank deposit, it is usually offered by banks at a higher rate of interest as compared to a savings account, until a specified maturity date. If you have funds in your savings account that you might not need immediately and if you are not satisfied with the rate of interest offered on the savings account, then fixed deposits are a viable option to invest your hard earned money into. They are an excellent investment option for people who want to invest their surplus funds.

Why should I invest in a Fixed Deposit?

With the wide range of investment options available, this is a logical question. Let’s look at some of the benefits of investing in a fixed deposit:

  • A fixed deposit is a safe mode of investment.
  • Almost every bank offers competitive rates of interest
  • Most banks allow premature withdrawal of funds, albeit for a small fee.
  • Investing in fixed deposits with long tenures can help you reap the benefits of compounding of interest
  • Some banks offer a secured credit card of the full value of your deposit.
  • Some banks offer free life insurance cover for fixed deposit account holders.

Deposit Accounts Interest Rates in UAE

Minimum Salary

Interest Rate

Loan Amount

Reducing Rate

What should I keep in mind before I invest in a Fixed Deposit?

There is a plethora of investment options available in UAE. For risk-averse investors, fixed deposits are a good option. There are different kinds of fixed deposits available too. Hence, you must primarily be clear about what you need from your investment. Once that is in place, a detailed study of the options available can ensure that you invest in the right FD. Don’t get carried away by the cross-selling officer; approach the bank once you know what you want. Some aspects to be kept in mind are:

  • Interest rates : You invest to earn, ensure that the interest rate offered by the bank offsets the inflation over the period of time and helps you grow your wealth.
  • Credit rating of the FD scheme : Most FD schemes have a credit rating to help you understand the important aspects of your investment.
  • Ease of premature withdrawal : The FD should allow you to withdraw or overdraft money during exigent times.
  • Interest payment frequency and options : Interest is paid monthly, quarterly, half-yearly, annually or cumulatively. You must choose the option that suits your needs.

What are the different kinds of Fixed Deposits?

While the base product features remain the same, banks and corporates have created different options for people with specific requirements. Yes, some corporates have also started offering fixed deposits to people. Here are some common types of fixed deposits available in UAE.

  • Basic fixed deposit : Fixed rates for fixed tenures is what defines a basic fixed deposit. Usually, these deposits offer an overdraft facility and allow premature withdrawal of funds.
  • Senior Citizen fixed deposit : These deposits have all the features of a basic deposit and usually offer a higher rate of interest and flexible terms.
  • Non Resident External (NRE) fixed deposit : Certain banks offer these accounts to NRIs to help them earn high returns by investing their foreign income. These interest earned on these deposits is tax-free in India.
  • Non Resident Ordinary (NRO) fixed deposit : Most banks offer these accounts to NRIs. The major difference as compared to an NRE fixed deposit is that the interest earned on these deposits is taxable in India.
  • Corporate fixed deposit : Corporates are slowing joining the banks in offering fixed deposit accounts to people. Also known as Company fixed deposits, they usually offer more attractive rates of interest as compared to banks. You must research the company well before investing in a corporate fixed deposit.
  • Wakala deposits : These are Shariah compliant contracts in which you authorize the bank (Wakil) to invest your funds in Shariah approved activities for profits. These are usually offered in AED and USD currencies. Some Wakala deposits come with pre-specified tenures and do not allow premature withdrawal of funds. Unlike the interest rates in basic fixed deposits, an estimated profit rate is provided to you which is indicative in nature but not guaranteed.

Salient features of a Fixed Deposit

  • Tenure : Across banks, fixed deposit tenures can vary from 1 week to 5 years.
  • Existing bank account : Some banks may have a prerequisite of having a savings or current account with them.
  • Interest : Both simple and compound interest options are available with most banks. You can ask for the interest to be credited to your savings account, monthly or on maturity.
  • Overdraft : Most banks offer overdraft facilities of up to 95% of the deposit amount. This can be used for exigent expenses.
  • Currencies : Many banks offer the option to invest in fixed deposits in foreign currencies like USD, GBP and EURO.

Eligibility

Every bank has its own eligibility criteria which needs to be checked individually. Minors are allowed to open fixed deposit account jointly with a guardian account holder. The following entities can usually apply for a fixed deposit account in UAE:

  • Resident Individual
  • Partnership
  • Sole trader businesses
  • Hindu undivided family
  • Private and public limited companies
  • Non-governmental organizations (NGO)
  • Public corporations
  • Registered societies/associations/clubs, trusts
  • Government/semi-government bodies/departments

What Documents Are Required?

As is the case with eligibility, every bank can have its own requirement of documents to process your account application. Apart from the application form, some basic documents needed are:

  • Original passport for verification along with a copy
  • Copy of the visa
  • Proof of address
  • ID proof
  • Existing Savings/Current account details

Choosing An Account

When looking around to see what account options are available, you have to be cautious. You need to ensure that you find options that you are comfortable with and that you can easily take advantage of them. A great option will be easy to profit off of but you should think about how well you can access your money and how much protection is involved.

You can always go online to compare different options in the UAE with each other. You can compare choices based on terms, credit ratings, interest rates and many other rules. There is a good potential for you to find an option that is right for your needs when looking online with care.

FAQ’s

Q. Is there a minimum amount I need to invest to open a Fixed Deposit?

A. Usually, banks accept fixed deposits of AED 10,000 and above. However, this may vary with the bank you choose to open an FD account with and the strength and duration of your association with them.

Q. Do I need a nominee for my FD account?

A.You have a choice of having maximum one nominee for your FD account. If you don’t want to have a nominee, then you may fill the ‘No Nominee Declaration’ form. Registering a nominee, however, is simple. All you have to do is fill the nominee’s name and details in the application form.