When you talk about financial planning, saving will always find its way into the heart of the discussion. That said, one of the most preferred and secured ways of saving is by keeping a bank savings account.
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And while there are lots of banks in the UAE offering various kinds of savings accounts for customers, choosing which one to go with can pose some dilemma. And one good way to make sense of it is by checking out important features and benefits that match your requirements and then compare them carefully. To know more about the factors to consider when getting a savings account, continue reading below.
What are the Things to Consider When Opening a Bank Account in UAE?
As you can expect, banks will come up with lots of attractive perks and offers to capture their target customers’ attention. However, we must know the basic things a good savings account must have, and then the rest will just be nice add-ons.
These are the things you need to look into when shopping for a savings account to avail from a bank:
1. Initial Deposit
To open a bank account, you need to initially deposit a certain amount. As you know, this varies from one bank to another. The initial deposit can range from AED 0 to AED 3,000, or even more in some banks, so make sure to consider how much money you can set aside in the bank for this purpose.
2. Interest Rates
The main feature and also a benefit offered by banks through their savings account is the interest rate that applies to the minimum balance maintained in the account. That said, banks offer competitive interest rates on their savings account. Therefore, when choosing which savings account and bank to go with, always compare interest rates offered by banks across the UAE.
3. Minimum Balance
After you’ve opened your own savings account, one of the important things you need to keep an eye on, aside from your bills linked to your bank account is the minimum balance on your account. Banks set different criteria when it comes to their minimum maintaining balance. This can range from AED 100 to AED 25K. Meanwhile, some offer zero maintaining balance, where the account holder is not required to maintain any minimum balance in the account for a certain period. That said, some zero-minimum balance accounts provide interest rates on the balance maintained in the account which is an advantage.
4. Fees and Charges
There can be different kinds of fees and charges that apply to a savings account. Examples of these include account maintenance fees and withdrawal charges. That said, some banks charge zero monthly charges on account maintenance. Therefore, it’s necessary to compare account maintenance charges, cash withdrawal fees, outward transfer fees, charges on non-maintenance of minimum balance. etc. when choosing a bank to open an account with.
5. Additional Benefits
Aside from the interest rate, some banks also offer a variety of benefits on their savings account. This includes perks such as a free debit card or a checkbook on the account. Other benefits include a limited number of outward remittances, withdrawals, etc. which are free of charge, free phone banking, online banking facilities, and much more.
Another important thing to consider when checking out benefits offered by a bank is whether they allow customers to open an account in multiple currencies that are not restricted to UAE dirhams.
Interestingly, some banks in the UAE like ADCB, HSBC, etc. even offer rewards and discounts on using the free debit card provided. That said, it’s also important to check the benefits provided by the bank when choosing where to open a savings account.
Another nice thing to consider, but this depends on your goals and how long you plan to stay in the UAE, is the ability to invest with the money you save in the bank.
Some banks offer investment portfolios where you can put some of your money while you are working in the UAE and earning more to save in the bank. This is actually a good way to make more money off your savings that is idly sitting in the bank. So make sure to talk about this with the bank’s financial officer before you decide to open a savings account with them. A little bit of research will prove to be extremely helpful depending on your financial goals and personal plans while in the UAE, so be sure to ask around.
And lastly, another crucial thing to look into is whether you have the option to get a credit card with your bank. Depending on how well you save up, banks can offer you a specific type of credit card that matches your lifestyle and funds in the bank. Although this is just an add-on benefit for you, it would be nice to know that you have this option should you decide to get a credit card in the future.
It can be quite tricky to pick the most suitable savings account because there are so many things you’ll see in the bank’s account brochure. And as you know, marketing will always find its way to tickle your curiosity and lead you into thinking that it’s the best option you should get right here and right now. However, you mustn’t be an impulsive shopper (this goes beyond choosing a bank account, really). Always take your time and step back to examine the choices that you have.
But now that you know the basic things that a good savings account must have, it will be easier for you to narrow down your options for the bank to go with while factoring other things such as your personal preference, accessibility to their offices, number of ATMs in your area, as well as special partnerships to stores that you frequent.
Remember, the purpose of getting a savings account is to save. That means, everything else comes secondary. Therefore, you need to make sure that you save properly and take advantage of the benefits provided on the account. That said, it’s crucial to pick the right bank and an account that serves your purpose as best as possible.