Like any other savings account, fixed deposit is a type of term deposit which is considered to be one of the safest investment in UAE. Most of the people prefer this kind of saving options and these are frequently available at Dubai banks. It is offered mostly by all the banks and financial institutions in the UAE due to stable economic conditions. In most of the cases, such type of services ranges from 7 days to 10 years. You can get high-interest rates on FD than a regular savings account so that to save the maximum amount of hard cash in your account for future use. Through such an account, your interest will be credited on a monthly, quarterly or annual basis, it depends on the choice of an account holder.
You will be required to invest your desired investment amount in one go but we suggest you open different deposit accounts so that to make a diverse profit system. To meet all of the requirements, one has to use a business fixed-term deposit account in a bank. To take maximum benefits the only way is to use it only for deposits so that your profit could increase. If you desire to withdraw funds before maturity, Banks and financial institutions can charge a premature withdrawal penalty on your fixed deposit. In this case, your profit margin would decrease.
What are the important reasons for investing in a Fixed Deposit?
There are different reasons and we will discuss all of these ones by one but you have the basic idea that fixed deposit is one of the safest investment options available in UAE. You have to invest a certain amount of money for a specified period of time and then your interest rate will become the profit that you can use every month for your other expenses.
FD interest rates vary depending on your deposit tenure and amount but I would recommend you deposit as maximum as you can because everything depends on first investment. FD interest is paid out in two ways:
- Cumulative deposits
- Non-cumulative deposits
In cumulative deposits, the interest is calculated quarterly or annually but is paid out at the end of the tenure. This is more beneficial than any other investment in the UAE with a little risk. While on the other hand in non-cumulative deposits, the fixed deposit interest is calculated annually, quarterly or at a discounted monthly rate. If you are interested in such schemes, there is a chance that you can get the best FD rates on your funds and the interest will be paid out according to your choice.
This is a bit similar to a business bank account in UAE as one can buy land or invest in growth schemes like mutual funds and the stock markets to earn higher returns. But, these investments always have risks involved so try to stick with the deposits. With a fixed deposit, you can earn a high interest rate on your investments with no risk involved.
Business Blog 