Fixed Deposit in UAE Banks

Fixed deposit is a bank deposit with a certain period of money deposit which lasts from several months to several years. Fixed deposits in the UAE are kept in banks and are equal to the amount paid. A fixed deposit is paid back to the depositor in full with the interest rate on top of it. The majority of the UAE fixed deposits don't provide for an opportunity to replenish or partially withdraw funds. This enables UAE banks to use this money in their operations. If a depositor is willing to partially withdraw his / her funds from the fixed deposit in the UAE, they will have to pay a fine in most UAE banks according to the terms of the deposit contract. The interest rate, in that case, will be minimal or zero.

How to open a fixed deposit account in UAE banks?

Many people prefer fixed deposits to savings accounts since the interest rate is higher for fixed deposits. The UAE banks are known for their reliability and efficiency. Thus, they often become the choice of businessmen who want to open a fixed deposit in one of the foreign banks. To open a fixed deposit account, you will have to sign a contract with the UAE bank specifying the details such as the date of the deposit opening, the date of the money withdrawal, the amount of money you’d like to deposit and the currency you make the deposit in.

What is the interest rate for a fixed deposit in UAE banks?

Different UAE banks offer an opportunity of opening fixed deposit accounts. In case you decide to do it in one of the leading UAE banks, Emirates NBD, you will be required to make the minimum deposit of 100 000 dirhams. The duration of the fixed deposit can last from 7 days to 5 years. Fixed deposit interest rates in Dubai banks depend on your choice of the bank and vary depending on the current official interbank rates.

Dubai Islamic bank probably offers the best-fixed deposit rates among UAE banks. It is called Wakala Deposit. There are long term, monthly and Maximiser Wakala Deposit. The calculation of the fixed deposit interest in UAE banks depends on the amount of your initial investment and the duration of the fixed deposit. Besides, fixed deposit rates in the UAE depend on the way their calculation is done. It can be performed in one of the following ways:

• by simple interest formulas;
• by formulas of compound interest;
• using fixed or floating interest rate in accordance with the terms of the contract.

If the contract does not specify the way of fixed deposit interest calculation in UAE banks, they are accrued according to the simple interest formula on a fixed interest rate.

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