Fixed Deposits or National bonds: Which provides high-interest rates?     

When someone has some extra cash mostly they tend to put the money in the savings bank account. According to a survey, only 40% of the people invest their money in some stocks/organization /gold, the rest all leave it in the savings account fearing losses and don’t want to take risk basically. Idle cash evaporates quickly and comes to no use, whereas if you make an investment it could have made a decent profit at least. Most of them fear in investing in any firms/organization and that is acceptable as there is no guarantee and you may experience a great loss too. Keeping this in mind, people put their money in the saving accounts which makes your money stay idle with very fewer returns. But there few investment options like fixed deposits, mutual funds, national bonds and much more where you put your money in the bank account safely, yet get good profits when you close the accounts.

National bonds or Fixed Deposit

Now the dilemma is about fixed deposits or national bonds. National Bonds is the company initiated by the government of Dubai and fixed deposits are offered by several banks in UAE. Both are equally trustable. National bonds involve very less investment which is AED 100 and can generate 40%-100% profit, which is immense. National bonds corporation generally invest the money into other markets and the profits earned with be distributed among the bondholders. So this is more kind of an investment than savings. In national bonds, you cannot break the bond until specific period i.e minimum holding period for a bond is 90 days. Whereas in a fixed deposits scheme a customer can get up to 1.50% interest rate annually and the main advantage is you can break the bond anytime you want to.

Check: Where to avoid investment in UAE

Fixed Deposits National bonds
Profit rates per annum 1.50% 2.89%(as per 2016 report)
Tenor Flexible. 1 week- 5 years(Varies with the banks)
90 days- 1 year (Can renew after a year)
Holding period Can break the bond anytime Minimum holding period of 90 days
Benefits Free life insurance, overdraft facility, reward points Rewards, lottery prizes

There are top banks in UAE like FAB, CBD, ADCB, and few more providing best profit rates on the fixed deposits and with added benefits like overdraft facility, rewards, and free life insurance. In 2016, National bonds provided a profit of 2.89%. Even national bonds provide rewards and lottery schemes. So the choice is between two investment schemes. But national bonds is more kind of savings with the benefits of an investment. As a final word, it is suggested that you invest and save at the same time. Both are the sources of extra money and additional money always comes handy.

Meet the author
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Nikitha is a Senior Analyst at She has been writing about personal finance, credit cards, mortgage, and other personal finance products in the UAE. Her work on Mortgage loans has been featured by the GulfNews and other popular Financial Blogs in the UAE.






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