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Features and Benefit of Fixed Deposit in UAE

Customers can store their cash at high rates of interest in a fixed deposit, which is offered by banks or financial organizations. This account, also known as a term deposit, is created for a set amount of time agreed upon between the bank and the account holder.

When funds are placed with a bank, the account holder begins to receive interest, which is calculated based on the deposit's term. The major aspect of an FD is that the account holder cannot withdraw funds before the maturity date; however, they can withdraw funds after paying a charge. By writing this blog Dhanguard will tell you about the importance and Benefit of Fixed Deposit in UAE

Why should you Choose Fixed Deposit account in UAE?

While fixed deposit interest rates are greater than savings account interest rates, there are several additional advantages to open an FD account.

Following are some of the reasons why an FD in the UAE is a good investment.

Assured Profits

Fixed deposit investments provide guaranteed returns. The rewards are often higher than those received by a savings account. Returns, on the other hand, may vary based on the deposit's term.

Flexible Durations

Fixed deposits in the UAE allow you to choose the duration of your deposit. Every bank has a minimum and maximum tenure requirement. Within this minimum and maximum range, the applicant can determine the length of their deposit.

Risk-Free Investment

This is one of the safest investments in the United Arab Emirates. As a result, it is suitable for individuals who do not want to jeopardise their money.

Dedicated Savings Accounts

A fixed deposit is a type of account that assists the account user in creating a suitable saving habit.

Features and Benefits of Fixed Deposit Account

The following are some of the most important features & benefits of Fixed Deposits in the UAE.

Investing for the Long-Term

A fixed-term investment (FD) is one that lasts for a predetermined amount of time. Only after the expiration of this period is the account holder able to withdraw money from it. They can, however, make early withdrawals for a charge if they pay the bank a specified amount.

High Interest Rates

One of the advantages of a fixed deposit is that the account holder may take advantage of the best fixed deposit rates in the UAE. Although these accounts have less liquidity than conventional accounts, they provide greater interest rates.

Helps in Choosing a Loan

Liabilities may occur as a result of uncertainty, and the account holder may be in desperate need of cash at such moment. They might take out a loan against their deposit account in this situation.

On-Demand Renewal

The majority of UAE banks provide the option of automatic renewal on these term deposits. The FD is automatically renewed at maturity with this option, eliminating the need for the account holder to do so manually.

Distributed Profits

The account holder receives the earnings or interest earned on the fixed deposit on a monthly, quarterly, half-yearly, or annual basis. The frequency with which profits are distributed is at the discretion of the banks.

Various Types of Accounts Availability

In the UAE, several banks enable clients to create joint FD accounts. Not only that, but these deposits are also open to minors.

The parties who can use these accounts are as follows.

  • Individual persons (including minors)
  • Joint Stock Corporations (JSCs)
  • Sole proprietorship
  • Partnership
  • Limited Liability Corporations (LLCs)

Eligibility Criteria to Open a Fixed Deposit Account in UAE

In order to get a fixed deposit in the UAE, the applicant must fulfill the bank's basic eligibility conditions. Different banks may have different conditions for qualifying.

Some of these basic needs are listed below

Residence

Only UAE citizens are permitted to open bank accounts with several of the UAE's banks. To receive an FD from the bank, these UAE citizens will need to provide a valid proof of residency.

Minimum Deposit

The bank has a minimum deposit amount that must be met. The applicant must deposit at least this amount into their account.

Age Limit

To be eligible for an FD, the candidate must be of a specific age. This age limit is set at the discretion of the bank in question.

Document Required to open fixed Deposit Account in UAE

Following are the required document for opening a Fixed Deposit Account in UAE

  • Emirates ID
  • Proof of Address;
  • A valid passport and additional passport-size photograph are required (original & copies)
  • UAE Residence Visa (original & copy)
  • For address confirmation, provide a recent utility bill or a signed rental agreement.
  • Documents related to your employment
  • Employer or Sponsor Letter

 

Minimum and Maximum Term for Investing in a Fixed Deposit

An FD can be as short as seven days long, with a maximum term of 10 years. However, because the banks choose the minimum and maximum tenures, they may differ from one bank to other. You can choose the duration of your FD account by considering the bank's minimum and maximum terms.

Conclusion

Fixed Deposits are amongst the most widely used investment products for preserving your funds in a safe and secure manner. However, before establishing a fixed deposit account, a customer must research all of the present fixed deposit strategies in the UAE and select an account that satisfies his or her financial requirements. Connect with Dhanguard for the required guidance regarding fixed deposit account in UAE.

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Frequently Asked Questions

You should go for a FDs over mutual funds and investments options similar to it, because of the guarantee of return on investment and safety of your funds. Since they are opened with a bank, they provide safety to your investments.

Usually the interest rates varies from 6-8%.

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