Fixed Deposit Interest Rates in the UAE
All top banks in the UAE offer fixed deposit investments. Here are some of the more profitable investments one can make in fixed deposits in the UAE*:
|Bank||Deposit Account Name||Profit Rate %||Maturity||Minimum Deposit Amount||Available in Major Currencies|
|NBAD||10 Year Smart Deposit||3.98%||120 months||AED 30,000||AED, USD, EUR.|
|7 Year Smart Deposit||3.1%||84 months||AED 30,000||AED, USD, EUR.|
|5 Year Smart Deposit||2.36%||60 months||AED 30,000||AED, USD, EUR.|
|FGB||3 Year Advantage Plus||2.75%||36 months||AED 350,000||AED, USD, EUR.|
|13 Month Advantage Plus||2.15%||13 months||AED 350,000||AED, USD, EUR.|
|1 Year Advantage Plus||2.00%||12 months||AED 350,000||AED, USD, EUR.|
|ENBD||3 Year FlexiDeposit||2.5%||36 months||AED 10,000||AED, USD, GBP, EUR.|
|2 Year FlexiDeposit||2.00%||24 months||AED 10,000||AED, USD, GBP, EUR.|
|1 Year FexiDeposit||2.00%||12 months||AED 10,000||AED, USD, GBP, EUR.|
|UNB||1 Year Accelerating Rate Deposit||2.00%||12 months||AED 50,000||AED only.|
|9 Months Accelerating Rate Deposit||1.7%||9 months||AED 50,000||AED only.|
|6 Months Accelerating Rate Deposit||1.4%||6 months||AED 50,000||AED only.|
|Noor Bank||1 Year Term Deposit||1.4%||12 months||AED 10,000||AED, USD, GBP, EUR.|
|9 Months Term Deposit||1.25%||9 months||AED 10,000||AED, USD, GBP, EUR.|
|6 Months Term Deposit||1.14%||6 months||AED 10,000||AED, USD, GBP, EUR.|
|SIB||1 Year Term Deposit||1.6%||12 months||AED 10,000||AED only.|
|9 Months Term Deposit||1.37%||9 months||AED 10,000||AED only.|
|6 Months Term Deposit||1.13%||6 months||AED 10,000||AED only.|
|EI||2 Year Investment Term Deposit||1.3%||24 months||AED 10,000||AED and USD.|
|1 Year Investment Term Deposit||1.2%||12 months||AED 10,000||AED and USD.|
|9 Months Investment Term Deposit||1.01%||9 months||AED 10,000||AED and USD.|
*It should be noted that all details mentioned above are as on July 2015. All the all details mentioned above are subject to change. It is advised that you contact your bank branch and find out all details of investment before making a decision.
What is a Fixed Deposit Account?
Fixed deposits (also called bank deposits or term deposits) are financial instruments offered by banks offering a higher rate of interest than regular savings accounts, until the specified maturity date.If you have a savings bank account and are unsatisfied with the rate of interest they offer, a fixed deposit may be what you’re looking for. While they differ from savings accounts in many ways, they offer an excellent avenue in which to save and grow your excess, investible funds.
If you have a savings bank account and are unsatisfied with the rate of interest they offer, a fixed deposit may be what you’re looking for. Fixed deposits (also called bank deposits or term deposits) are financial instruments offered by banks offering a higher rate of interest than regular savings accounts, until the specified maturity date. While they differ from savings accounts in many ways, they offer an excellent avenue in which to save and grow your excess, investible funds.
Types of Fixed Deposits Available in the UAE
There are different options when it comes to investing in a Fixed Deposit today, with each one catering to a specific requirement. Contrary to popular beliefs, banks aren’t the only organisations which offer FDs, with some corporates too jumping onto the fixed deposit bandwagon. Mentioned below are some of the popular FD options for you.
Standard Fixed Deposit – These are fixed deposits which have fixed tenures which generally range from a few days to 10 years. Interest rates on such FDs are typically fixed for deposits of a particular tenure.
Special Fixed Deposit – These are fixed deposits with unique tenures, earning a higher interest compared to others.
Senior citizen Fixed Deposit – These fixed deposits are specially designed for senior citizens, offering higher interest rates and flexible terms in most cases.
NRE Fixed Deposit – A Non Resident External (NRE) account can be opened by NRIs who wish to have a high return deposit. This can be maintained in Rupees and is ideal for those looking for an avenue to invest their foreign income. These deposits do not attract tax in India, making it a great investment option. This account can be opened in specific banks only.
NRO Fixed Deposit – A Non-Resident Ordinary (NRO) account can be opened by NRIs residing in any part of the world. The interest earned through this deposit is taxable in India. Typically, most NRO FDs have a tenure ranging from 7 days to 10 years, giving you flexibility in terms of your deposit period. These can be opened with banks, with different incentives provided by different banks.
Corporate Fixed Deposit – A corporate or company fixed deposit is an investment option offered by companies. Individuals have an option to invest in these deposits for a fixed period, with the company offering attractive interests on the investment. Typically one should exercise caution while investing in a corporate FD as the deposit is unsecured, making it a risky investment option.
Features of Fixed Deposit Accounts in the UAE
- Term:Fixed deposit terms vary from 1 week to 5 years, depending on the bank and the scheme you chose.
- Investment:The amount can be deposited only once. For more deposits, more accounts need to be opened.
- Prerequisite bank account:You may or may not need an existing current or savings bank account from the bank you wish to take a fixed deposit.
- Earnings:Interest can be credited to your regular savings account every month, or can be ‘compounded’ or added back to the initial amount, thus increasing the total amount on which interest will accrue.
- Overdraft facilities are available up to 95% of your deposited amount, to meet any emergency expenses you may have.
- Maturity:Fixed deposits reap the greatest rewards when you let them reach maturity and draw your funds at the end of your deposit term.
- Investment flexibility:Many banks offer you the facility to invest in fixed deposits in many foreign currencies including US dollars, pounds sterling and euros.
- Account holder flexibility:Minors can open fixed deposit accounts in many banks along with a guardian account holder.
Benefits of Investing in Fixed Deposit Accounts in the UAE
- It is considered one of the safest places in which to invest funds.
- They offer high rates of interest, for varying terms.
- Some banks give you a secured credit card up to the full value of your deposit.
- Almost all banks in the UAE offer you the option of drawing a certain amount of money as and when you require it – for a fee.
- Many banks offer loans against fixed deposits instead of against your fixed assets.
- You can earn reward points from your bank, depending on the bank, tenure, and amount of your fixed deposit.
- The longer you leave your money in fixed deposits, the more interest they accrue, effectively making your stagnant funds work for you.
- Some banks offer free life insurance cover for fixed deposit account holders.
Documents Required to Open a Fixed Deposit Account in the UAE
- Original Passport and Labour Card.
- Valid Visa in case of expats.
- Application form from the bank you wish to invest in.
- Address and ID proof.
- Non account holders will be required to open a current or savings bank account to be able to invest in fixed deposits.
A Fixed Deposit vs Life Insurance
Individuals who are not aware of terms might get confused between life insurance and fixed deposits, unsure as to which product is best suited for them. Both these terms are unique, offering specific benefits, making them specialised products. Here are some of the major differences between fixed deposits and life insurance.
|Fixed Deposit||Life Insurance|
|Tenure||Flexible tenures, ranging from 7 days to 10 years in most cases.||Fixed tenures depending on the plan taken.|
|Type suited for||Medium and short term investment||Long term|
|Amount||Individuals can opt to deposit an amount they have.||The premium is decided by the company and an individual is expected to pay that.|
|Return||Typically offer fixed returns||Some insurance schemes (ULIPs) are market dependant, with returns varying.|
|Assured returns?||On maturity an individual is entitled to assured returns.||Some insurance schemes do not offer any returns on maturity.|
|Risk factor||Low to highly risky, depending on whether one opts for a bank FD or company FD.||Only certain insurance schemes are risky.|
Top Fixed Deposits in UAE
The following banks in UAE offer Fixed Deposit Accounts as one of their priority products-
Factors that affect the Fixed Deposit Rates
Fixed Deposits offer an excellent investment option for individuals who are keen to see their money grow, minus the risks attached with market investments. Traditionally most banks offer decent rates on fixed deposits, using the money in these deposits to increase their fund base. With changing times, however, fixed deposits are becoming prone to rate cuts, mostly on account of the following factors.
- Inflation – Inflation is a reality which we cannot escape and it has a bearing on your FD rate as well. Inflation traditionally means that the cost of essentials increases, reducing your spending power, which in turn could see people defaulting on loan payments. To get more funds during inflation, most banks increase their FD rates, enticing people to deposit money.
- Recession – A recession typically results in a slowdown in the economy, with central banks deciding to release more funds into the market. Banks, on account of the funds released, can lower their interest rates on FDs.
- Demand and Supply – The world runs on a demand and supply chain and banks are no different. Interest rates fluctuate depending on the demand or lack of it for a particular FD, with a lower demand meaning reduced rates and a higher demand giving rise to increased rates.
- Individual performance – Interest rates on FDs are linked to the performance of a particular bank and banks can change rates to adjust their performance.
What should you look for in a Fixed Deposit Scheme?
Investing in a Fixed Deposit scheme might seem straightforward and simple, but paying attention to some minute details can help you land a great investment deal.
- Interest rate – The primary aim of investing in a FD scheme is to see your investment grow, but choosing a scheme which doesn’t live up to your expectations could make it redundant. One should consider inflation and calculate whether the interest earned over a period will offset it.
- Credit rating – Most FD schemes have a credit rating associated with them, helping prospective investors figure out important details. Choosing a FD with a good credit rating is safe, ensuring your money is at no risk. Similarly one can opt for a FD with different credit ratings, depending on what their ultimate goal is.
- Liquidity – Is it easy for you to get money through your FD during emergencies? Most FDs have a lock in period, during which one doesn’t have access to the money. Checking this could help you prepare a contingency fund, so that you are not left hanging in dire circumstances.
- Interest payment – Interest can be paid either monthly, quarterly, half yearly, annually or cumulatively and one should choose a FD which pays them according to their requirements. Opting for the wrong payment mode could leave you in a lurch, making your investment temporarily redundant.
How to invest in a Fixed Deposit?
Investing your hard earned money in a Fixed Deposit is a good choice if you do not want to take risks. With multiple FD options available today, one should do a thorough check before finally putting your money in the deposit. The most important step is to figure out what you require from a FD, and base your actions after this is determined. Investing in the right FD can also make a huge difference, primarily because it is easy to get overwhelmed by the options available. The formalities associated with opening a FD are simple once you figure these points out, with banks and corporates streamlining the process to make it hassle-free and easy.
The BankBazaar.ae Advantage
Traditionally, you would have to visit each and every bank to find out their various interest rates, terms for deposit, clauses, etc., or at the very least scour the internet and have many figures fly at you in different formats. This could be confusing and may even put you off the idea of investing in fixed deposits.
- The BankBazaar comparison tool for fixed deposits in the UAE will gather and collate all relevant information in an easy-to-use format, making it easier for you to choose the right scheme.
- Many factors are taken into consideration, like your desired investment amount, the term you wish to invest for and the interest rate you will receive – BankBazaar will gather this information from all over the internet.
- You’re likely to receive better offers, terms and rates applying through this site, and may even discover lesser-known fixed deposit schemes that you may have overlooked.
Frequently Asked Questions - FAQs
Is there a minimum amount that I must deposit to open a Fixed Deposit account, and what currencies can I use to put money in my Fixed Deposit account?
Do I need a savings or current account to open a Fixed Deposit account, and can minors apply too?
Are the funds in my NRO Fixed Deposit Account repatriable?
Can I convert to NRO from my resident account?
Do I need nominees for my Fixed Deposit Account or can I open one without any?
The minimum amount that you must invest to start an FD account is AED 10,000. Most banks accept all major currencies when opening FD accounts, including Euro, GBP, US dollar and UAE Dirham.
Customers are required to have their own savings or current accounts before opening their FD accounts, and minors can only open their FD accounts along with a guardian.
Although the principal amount cannot be repatriable, the interest you earn of the fixed deposit can be fully repatriated. The principal amount can only be used to make local payments, but other sources of income like rent dividends, pensions and suchlike are also repatriable provided you produce the required documents from a chartered accountant. The maximum amount of money that customers are allowed to repatriate from their NRO accounts is USD 1million.
Customers can convert their resident accounts to NRO if their residential status changes to Non-Resident from Resident.
Customers have a choice when it comes to nominees. You can either open an account without any nominees by simply filling in and submitting the No Nominee Declaration form, or can register a maximum of one nominee by simply entering the candidate’s name and details in the application form.
News about Fixed Deposits in the UAE
Bank Deposits in the UAE Surge Even As Government Contributions Reduce
Even as the UAE prepares for slow economic growth, the deposits in banks surged by 4% by the end of January. The deposits now stand at AED 1.47 trillion of which 24% has come from either the government or Government Related Entities. Even though, at AED 353.3 billion it is a significant amount, it is still 1.4% less than last year. However, the reduction in government and GRE deposits is hardly noticeable in light of the fact that deposits from the private sectors have made up for the shortfall. The trend has been attributed to the expectation of a liquidity crunch as the government tries to rein in budget deficits.
11th April 2016
Short term deposits account for 35.25% of the total deposits in UAE’s banks
In the banks present in the United Arab Emirates, short term deposits account for 35.25% of the total deposits which amount to AED 704.76 billion at the end of August. Many banks are trying to solve the equation of increasing the liquidity. Banks has plans to make long term deposits to stabilize liquidity levels and reduce rates of interest in general on loans.
26th October 2015
Arab Expats are more decisive with making investments
A whopping 67% of the Arab Expats are extremely confident when it comes to making their investments, when compared to European or Asian expats and even Emirati citizens. A study showed would be more interested in learning the way they could boost their investments by trading in portfolios in the financial markets. 88% of the resident of UAE have obligations of credit and credit cards are one of the most popular among them. More than half of the UAE would like to have a financial advisor help them with financial literacy and how to make investments.
12th October 2015
UAE draws FDI of a whopping $100 billion
In the past ten years UAE has exceeded their Foreign Direct Investment by US $ 100 billion, in the planning for their economic strategies the Minister for Economy said UAE’s now aiming to lower the contribution of the oil sector's from 69% of their GDP to around 20% in the coming few years through a diversification drive. The Minister also said the aim is to reduce consumption by 10 %, leading to a saving of Dh3.5 billion per annum in government spending. The UAE is also a major hub that connects both the East and the West by air and sea.
12th October 2015
Survey of financial health in the UAE reveals interesting data
A recent survey of the financial health of the residents of the UAE, conducted by National Bonds, revealed that more and more people are now saving for retirement in the UAE. Of the people who participated in the survey 81% were married while 18% were bachelors and only 1% were divorcees. 62% of them had children, 72% were between the ages of 26 to 40 years of age and 19% were within the age group of 41 to 55 years of age.
The findings of the study revealed that the percentage of people that saved for their children's education had come down by 10% to 14%. It also showed that 13% of the participants were saving just for basic needs. It also showed that 48% of those with children did not have any emergency funds saved up. The survey also revealed that while, in comparison to the previous quarter, there has been a 3% increase in the number of people paying back personal loans, there has been a drop of 3% in the number of those pay back mortgages. Another thing revealed by the survey was that of those between the ages of 18 and 25 years, 73% saved regularly while 27% didn’t have any specific plans for savings.
19th August 2015