Everything You Need To Know About Fixed Deposits In The UAE

Looking for ways to invest your money can be a daunting task, especially for those who are new to the world of financial investments. 

However, compared to the various investment options available, fixed deposits are ideal for investors who are averse to taking risks. A fixed deposit is an investment tool that allows investors to earn guaranteed returns on their money with little to no risk.

Many investors prefer bank fixed deposits over stocks as the former is considered safe and convenient. Here are a few things to know before you open a Fixed Deposit Account. 

What is Fixed Deposit?

A Fixed Deposit or commonly known as FD is an investment tool offered by banks where you deposit money for a set period of time in return for a fixed amount of interest on your cash. Although rates can be attractive, you won’t be able to access your money until the given maturity date.

How Does a Fixed Deposit Account Work?

When you invest in a fixed deposit account, you have the option to choose a tenure (also known as ‘term’ or ‘maturity date’).  

The minimum and maximum tenure offered may vary from one bank to another. Generally speaking, the term for a fixed deposit account can range from 7 days to 10 years.  

Also, the interest rate on the deposit depends on the period for which the funds are placed with the bank.

The flexibility of the tenure gives you the ability to manage multiple fixed deposit accounts spread across different tenures. That way, you will be able to earn higher returns on your investments. 

What Is the Difference Between a Fixed Deposit and Savings Account?  

A Fixed Deposit account is similar to saving accounts in that they’re both low in risk and offer a guaranteed return on investment. 

However, a key difference between the two is the interest rates offered. Fixed deposit accounts offer higher interest rates, around 3% or more per annum. Savings accounts, on the other hand, offer interest rates below 2% per annum.

Another difference between savings account and fixed deposit accounts is that the latter is a term deposit where the amount of deposit and interest rates are pre-determined. 

Put simply, once a deposit is made, the rate of interest will remain fixed till maturity. Therefore, a fixed deposit account is a great way to secure your savings return in an era of falling rates, but you should also know that the opposite is true. If you deposit your money in a fixed deposit account just before rates rise, you won’t benefit from the increase. 

Compare the Best Fixed Deposits Accounts in UAE 

If you have money to set aside and are interested in guaranteed returns, a Fixed Deposit Account may be the right investment for you. We have listed below top 3 banks that offer flexible tenures and competitive interest rates in the UAE. 

  1. ADCB Fixed Deposit Account 
Min Balance to MaintainAED 5,000 Or equivalent in currencies.
Currency AccountYes 

Benefits & Features:

  • Open to UAE nationals, expatriates and non-residents.
  • Flexible tenures ranging from 1 month to 12 months.
  • This account is available in both Islamic or conventional.
  • Earn touchpoints for deposit amounts greater than AED 10000.
  1. RAKBANK Amal Term Investment Deposit 
Min Balance to MaintainAED 25,000
Currency AccountYes 

Benefits & Features:

  • This is an Islamic account.
  • Flexible tenures from one week to 12 months.
  • Available in all major currencies.
  1. Noor Bank Term Deposit  
Min Balance to MaintainAED 10,000
Currency AccountYes 

Benefits & Features:

  • This is an Islamic account.
  • Flexible tenures ranging from 1 month to 12 months.
  • This account can be opened in AED USD GBP and Euro.