the lurch. Most live pay cheque to pay cheque with no 'rainy day funds' i.e. savings.
What's with blasé attitude to savings? Many argue that it is not a good long-term solution. Savings accounts in the UAE currently offer 0.5 to 1.5% annual interest. Citibank offers 0.10-0.15% per annum on the monthly minimum balance per account. Like many other countries, inflation at 2.2% in 2017 in the UAE, beats savings rate. So saving cash reduces your buying power.
Fair point. But that's also missing the whole point. With interest rates at the levels they are, savings accounts are not to meant to make stellar returns and built for a specific purpose. It's safe, conservative, low-risk and low-reward alternative. It's a far better option than keeping cash under the mattress carrying in your pocket or have then into a current account - where you are likely to spend it. True you can also place it into volatile sectors, long-term investment but you can use these alternatives for your retirement plans and lock up your funds for a while.
With savings accounts, you can access your money when you need it - which is 'the point' of savings accounts. If you are you looking to put some money aside, earn interest with flexibility - then a savings account is just what you need.
Thankfully, more UAE consumers see the value of a 'good old fashioned' savings account. In fact, savings account balances in the UAE amounted to AED 158.5 billion ($43.15 billion) during the first quarter of 2017, a growth of 3%, over the same period in 2016, according to the latest UAE Central Bank statistics.
However, the value of savings accounts - be it opening or maintaining one, is helpful when you are accumulating funds to invest later. It is safe, secure way of keeping the surplus liquid money. If you have the debit card and online banking activated for your savings account - then you can access all financial options without visiting the bank.
Of course, not all savings accounts are the same. Few of them come with monthly/quarterly giveaways for top savers.
In fact, you may already have a savings account. It may be an add-on to your current account that you could use to start saving. Look for one that offers multiple currencies, offers free withdrawals, online banking. Work out where you can afford to cut your outgoings, and put the savings away into one of these accounts.
A regular savings account will have low interest rate but no restrictions on how many times you withdraw funds.
Also, consider prize-linked savings accounts that come with cash prizes and let you recoup your deposit. The more you save, the better the odds of winning. More of a lottery, the downside is that, if you don't win, you won't earn any interest or profit, as such accounts come with 0% interest. You could shell out an early encashment fee - if you claim the deposit back within a given period. So, invest cash that you don't need for some time.
Regardless of the type of savings account, opening one is straightforward.
Apply online, visit any Citibank branches or call a representative who will assist you. As they say, money saved is money earned.
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