Guide to savings accounts

In this guide, we summarise how savings accounts work – from interest rates to rules on accessing your money – and look at some alternatives for comparison.

What you’ll learn: 

What is a savings account?

How does savings account interest work?

Minimum balance requirements

Can you lose money in a savings account?

Savings accounts or investment accounts?

Savings accounts allow you to earn interest on the money you put away.

You may have less access to your money in a savings account than a current account that’s designed for everyday spending, but you can earn interest to help your savings grow.

Typically, the higher the interest rate, the more restrictions on accessing your money.

The right savings account for you will mainly depend on how much access to your money you need, and what kind of interest rate you’re looking for.

There are two main types of savings accounts in the UAE:

Term deposits have a fixed term, typically ranging from 1 to 36 months or more. If you withdraw money during your fixed term, you’ll either be charged or you’ll lose some or all of the interest you’ve earned.

Generally, the longer term you commit to, the higher interest rate you’ll get, but access to your money will be more limited.

Explore: Our Term Deposit Account

Easy-access, or flexible savings accounts, usually have lower interest rates, but you have greater control over and access to your money.

You might be able to withdraw from your savings account via online banking at any time, and some accounts even come with a debit card for cash withdrawals and over-the-counter transactions.  

Explore: Our Savings Account and E-Saver Account

The interest rates you’ll see when comparing savings accounts are the annual rates. They represent what you’d earn on your balance if you held it for a year.

Some savings accounts pay interest monthly. This means you get a month’s worth of interest each month, instead of a year’s worth at the end of each year or the total amount at the end of your term.

One benefit of interest being paid monthly is that you start earning interest on that interest payment straight away.

Some savings accounts require you to have a minimum balance each month, and you could be charged for having less than the minimum at any point.

Keep an eye out for your account’s minimum requirements and what the charges are. Our E-Saver Account, for example, has no minimum monthly balance.

One of the main benefits of a savings account is that, if used correctly, your money can’t go down in value, aside from the impact of inflation.

This depends on your savings goals, your attitude to risk, and your personal preferences.

Here’s a quick list of the pros and cons and main differences between savings and investments to help you decide:

Explore: Saving or investing?

A savings account offers a low-risk way to grow your money while still maintaining control over your finances. You can choose between a term deposit for higher returns or an easy-access account for more flexibility. 

No matter what you’re saving for, a savings account can help you meet your financial goals.