🏦 Best UAE Savings Accounts in November
- Kacper Duda
- Nov 20, 2024
- 4 min read
Updated: Dec 29, 2024
With the recent UAE Central Bank rate cuts down to 4.65%, gone are the days where you could make 5%+ in interest in a savings account.
Another US Fed rate cut is expected in December, which will inevitably translate into a UAE Central Bank cut (quick explainer here: the AED is pegged to USD, so the UAE Central Bank closely follows the US monetary policy)
Good deals are still out there and you can get 4%+. You will need to act fast though, as the downward trajectory of savings account interest rates is almost inevitable.
Why should your money be in a savings account?
There are 3 important reasons why you should keep your money in a savings account, not your current account:
Interest - Keeping your money in a high-interest savings account makes sure your money works for you. For every AED 10,000 you put in a savings account you can easily earn AED 450 interest per year.
Protection - Your savings account doesn't have a credit or debit card attached to it. It's also one step removed from your salary account. This makes it a lot harder for scammers to access it, hence your money stays safer.
Value - With inflation, your money devalues over time, as the cost of goods and services keeps rising. Having interest applied to your savings counterbalances inflation and makes sure your money holds its value (at least most of it).
What are your options?
There are two types of savings accounts you can choose from:
Easy-access (variable rate) account - With this type of savings account your money earns interest every day and stops earning interest when you withdraw it. The downside is that the interest rate is fully variable and there is no guarantee that the rates will continue at the level you sign up at. As we expect the rates to go down you might risk the rate falling soon after you put your money in.
Fixed-term accounts - You fix your interest rate with the bank for a set period of time (usually 1, 3, 6 or 12 months) in exchange for keeping the money in the account for that period. IMPORTANT: You can always access your money (so it's not locked away). The only thing that might happen is that you get reduced or no interest on your savings if you take them out early.
A quick note on promotional periods: Banks will offer promotional periods on savings accounts. For variable rate accounts, it means that after that date the rate may drop and you will get less interest. For fixed accounts, you have to get the product before the end of the promotion and the rate will stay fixed for the full term (i.e. 1, 3, 6 or 12 months).
Best savings accounts out there today
There are a number of variable and fixed-term accounts on offer currently. Which one is right for you depends on your circumstances. Further below, you can see what we would do to help guide your decisions.
Bank account | Rate | Any catches |
|---|---|---|
4.6%-5% fixed term, 4% variable | You can fix for 6 or 12 months at 4.6% and the bank won't be able to change the rate in that period. 1 and 3-month fixes also available. Min. AED 35,000 required for Wio Plus. | |
4.15-4.25% fixed | Fixed for 6 or 12 months, however, these rates are only applicable until 29/11. As long as you open it by then, the rate will be guaranteed for the full period. Minimum AED 10,000 for new HSBC customers; new funds of AED 100,000 for existing customers. | |
4.5% variable | Variable rate, may change at any time. Min. balance of AD35,000 required. One withdrawal per month without losing interest. | |
5.25% variable | This rate is applicable until 30/11 on new funds only after which it may drop to ca. 2.5%. FAB has extended this promotion period a number of times before but there are no guarantees. |
What we would do
With no expectation of interest rates going up, if you have savings that you likely won't need to access over the next 12 months (such as your emergency fund), now is the time to fix. Remember, you can always access the money, so all you're risking is a portion of the interest.
The variable rates are fairly comparable, so if you have savings that you know you will need access to, make sure you keep them in at least a variable interest account.
Does a savings account restrict flexibility?
No, at worst, you will be just as well off as if you kept your money in a current or salary account. At best, you can earn up to 4.6% more over the next year. All money remains accessible to you at all times.
Are savings accounts safe?
Yes. While there is no deposit protection scheme in the UAE, all the savings accounts we suggest are regulated by the UAE Central Bank and are generally considered safe.
As always, make sure you take precautions against scammers and never share any passwords, login details or OTPs with anyone.
Happy savings!
Disclaimer: Please bear in mind that this email does not constitute financial advice. Any choices you make you are solely responsible for. We always aim to provide highest quality, independent views but do your own research to ensure you’re comfortable with any changes you make to your personal finances.
