Savings Accounts

Savings Accounts guide

Even with base rates at historic lows in the region it is still possible to make saving pay.  The best easy savings accounts pay up to 2.5%.  A savings account is just a place to stash unused cash and earn a higher interest rate than you would in your current account.

Got debts?  Got a mortgage?  Can you really lock the money away to secure the best interest rate?  If you have credit card or personal loan debt it can make sense to clear this prior to having wider savings.  The one exception to the rule is trying to have 3 – 6 months living expenses locked away for an emergency.  Mortgage debt tends to be fairly cost efficient so in most cases it is best not paid down (depending on your personal circumstances of course).

The difference between a savings account and your normal day-to-day current account is simply that a savings account has less functionality and tends not to offer debit cards, cheque facilities etc.

Top 3 points to watch with your savings account:

  1. ‘Bonus’ rates.  Many providers will offer attractive initial rates that later revert to their much lower standard rate at a later date.  This doesn’t need to be a problem, just go into it with your eyes wide open.
  2. Easy access?  Some accounts are easy access via the teller service or ATM.  Others are easy access but only online.  A smaller number require notice to access them, or you sacrifice interest earned if you need to access the funds early.
  3. Withdrawl limits?  In line with point two even some ‘easy’ access accounts have a maximum number of withdrawls you can make in one month (usually one).  If you have a large sum this can be very expensive in lost interest if not managed carefully.

The best-buy easy access accounts…

Don’t just go for the highest rate necessarily, ensure the rate isn’t about to drop, check any additional benefits and then choose the one most appropriate to you circumstances. 

RAK Bank’s F@st S@ver Account is currently very competitive offering 2.5%, with a limit of just one withdrawl per month.  Emirates NBD also offer 2.5% on their Tiered Savings Account, higher balances required here however.  Also don’t discount ADCB’s Millionaire Destiny Savings Account, while the interest rate is lower at 1.25% you have the chance to win up to 12 million AED in a year (note that if your balance drops below 5,000 AED you will not be included in the monthly draw).  Good luck!