Islamic Accounts in Dubai, UAE

In the world that we live in today, banks and financial organizations are constantly endeavouring to maximize their profits at any cost. There is little or no consideration to the human side of money or the socio-economic aspects of finance. Islamic banking has the perfect balance between the traditional values and modern needs. It is based on the pillars of Justice, Morality and Equity and is an effort made by financial institutions to balance their social and financial obligations. It is based on the principles of Sharia with the following key aspects:

  • Riba : Riba can be translated to exorbitant interest charged on debts. This is strictly prohibited.
  • Gharar : Gharar translates to risk or uncertainty. Islamic banking tries to avoid uncertainty in contracts. Financial institutions might take reasonable risks in investments.
  • Zakat : Zakat is one of the five pillars of Islam which can be translated to sharing wealth with the poor. This creates an equitable distribution of wealth in the society and increases opportunities for growth and development.
  • Mudaraba : It is a partnership in profit whereby one party provides capital and the other party provides skill and labour.
  • Illicit activities prohibited : Islamic banking ensures that the money lent out by them is not used for any illicit activities like gambling, production of alcohol and any such activities which can have a negative impact on the society.
  • Equal share : Profits and/or losses are shared equally between the financial institutions and common people.

Islamic Accounts Interest Rates in UAE

Minimum Salary

Interest Rate

Loan Amount

Reducing Rate

Islamic Banking vs. Conventional Banking

Islamic banking is fundamentally different from conventional banking. Based on Shariah laws, it has a list of do’s and don’ts which make it a unique financial proposition. Let’s take a look at what sets them apart:

Islamic Banking Conventional Banking
Islamic banking operates on the basis of profit and loss sharing. In case, the borrower suffers losses, the bank shares these losses based on the mode of finance used. Interest is charged even if the borrower suffers losses by using the bank’s funds. It is not based on profit and loss sharing.
It tries to create a link with the economic system by using trade related activities. It helps contribute directly to the economic development. It uses money as a commodity which eventually leads to rise in prices.
Profit on trade of goods or service charges are the major avenues of earning money by Islamic banks. Time is the factor considered while charging interest on the principal loaned amount. This is how the bank makes money.
Repayments of sums for deposit accounts are only guaranteed in Islamic banks if the account was based on the principle of Al-Wadiah. If not, the depositor will share the losses of the bank’s investment in accordance with the Mudharabah concept. Maturity amount is guaranteed in conventional banking. The bank has a liability to pay the depositor at the agreed rate of interest.

Types of Islamic Accounts

Let’s look at some Islamic accounts offered in the UAE.

  • Islamic Savings Account : Most banks offer Islamic savings accounts to their customers. The funds deposited in these accounts are invested in Shariah-compliant assets and the profits/losses are shared between the account holder and the bank.
  • Islamic Current Account : Under Islamic banking, funds deposited in current accounts are interest-free loans given by the account holder to the bank. The bank can invest these funds and the customer has no share in the profits or losses made by these investments.
  • Islamic Fixed Deposit : While Riba (interest) is prohibited under Sharia laws, making returns on your investment is permitted. The funds deposited in an Islamic fixed deposit are utilized by the bank to buy a Sharia-compliant asset/commodity. This asset is then sold back to the bank at a pre-agreed marked-up price.

Apart from these, Islamic personal loans, car loans, home loans and business loans are also available for customers.

Features of Islamic Accounts

Apart from being Sharia-compliant, Islamic accounts have some or most of the following features:

  • Usually, Islamic Savings and/or Current accounts come bundled with a host of free services like

    - Debit card

    - Internet banking

    - Phone banking

    - SMS banking

    - Mobile banking

  • Most banks offer these accounts in AED and USD currencies. Some banks might accept accounts in other foreign currencies too.
  • Islamic fixed deposits offer an indicative profit rate unlike the interest in conventional fixed deposits. Usually, they have a pre-specified tenure and don’t allow premature withdrawal of funds.
  • Being interest-averse, Islamic loans (personal/car/home/business) have a cooperative structure encouraging profit-sharing and fair trade. They follow the Islamic principles of banking.


Each type of account and bank will have its own eligibility criteria which needs to be checked individually. Some common eligibility criteria are:

Age : Usually, any financial transaction requires the applicant to be at least 18 years of age. Minors can open some accounts jointly with a guardian.

Nationality : Most of the accounts offered by banks are available for UAE residents and non residents. The documentation required and charges applicable may vary.

Type of Entity : Depending on the type of account and bank you apply to, certain entities are permitted to open accounts in UAE. Some commonly accepted entities are :

  • 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


Q. Can a Non-Muslim open an Islamic account?

A. Yes. Islamic accounts are not available to just Muslim customers. Anyone who believes in the Shariah principles of banking can open an Islamic account.