Service fees are said to be the biggest money-maker for banks. Those small amounts of money that you pay when you withdraw cash from the ATM machine, when your balance is running low or when you exceed your free teller transactions can easily bleed your bank account dry.
Between March and June, Gulf News approached 15 leading banks across the country. Of the 15 banks, ten have willingly opened their tariff books and we found at least five of them with interest-bearing accounts that don't levy any maintenance fees or require salary transfers, and are open to bank with anyone earning Dh3,000 or less a month.
There are banks in the UAE that offer high interest/profit rates, but they have been excluded from the list because they have tight and complex conditions, and they cater mainly to the medium to high income bracket.
And while some banks require a minimum salary of Dh5,000 to Dh25,000 to be able to issue cheques, these banks grant free chequing facilities even to lower wage earners.
Welcome development for customers
Banks are generally known for inventing various fees and charges. Those in the UAE are no exception, but following the recent Central Bank circular, many banks have revised their tariff and slashed their fees significantly.
Since the circular came out, some fees have been forbidden, others capped or reduced, and minimum balances are now lower with some banks. Fees for account opening, dormant accounts and bulk cash deposits and withdrawals over the counter are prohibited.
Emirates Bank, for instance, has scrapped the Dh30 monthly minimum balance fee for Value Account holders and reduced the minimum balance for current account from Dh5,000 to Dh3,000 per month. It also slashed the low balance fee from Dh75 to Dh25 per month. While this is a welcome development for consumers, it may not be good for the banks and their shareholders, industry experts say.
Top five banks
Disclaimer: This is not a comprehensive list. We tried to contact as many banks as possible. The data were collected over two months. We have tried to provide the most recent figures. For latest conditions and rates, please contact the customer service of the respective banks.
This bank definitely beats the competition in terms of returns. Its Easy Saver account offers one of the highest interest rates in the market, pegged at three per cent per annum as of June. This account has no annual or monthly maintenance fee. Customers get unlimited free online transactions.
Over-the-counter deposits and withdrawals are also free of charge. And what's more, you don't have to be a high salaried customer to open the account. The minimum pay requirement stands at only Dh3,000 per month, and pay transfer is not mandatory.
There's one downside: Your money earns interest provided you have zero withdrawals during the month. Like most banks, Mashreq offers a free chequing account that requires a monthly balance of Dh3,000. A Dh25 standard fee will be charged if the balance falls below the threshold.
Rakbank is one of the two banks that offer an interest-earning account that lets even the lowest wage earner issue chequs. The bank's Rakvantage, an interest-bearing transaction account, is open to anyone — no matter their salary — and offers interest ranging from 0.25 per cent to two per cent per annum. The interest is calculated on a daily basis and paid every month, and customers can transfer funds internally within Rakbank accounts for free.
Rakbank's F@st S@ver, an online interest-bearing savings account, offers 2.5 per cent per annum for dirham deposits and 1.5 per cent for US dollars. To maintain the interest, however, the customer can have up to one withdrawal and/or five utility credit card payments per month. Those earning as low as Dh3,000 a month can use this facility. It does not have monthly maintenance fees and you will get a free debit card.
You can actually bank with HSBC and earn interest. Through its eSaver, an online savings account, your money can earn 2.75 per cent interest per annum. Interest for this account is computed daily, but it is forfeited if the number of withdrawals exceeds one in a calendar month.
This is one of the hassle-free accounts, given that no maintenance fees, minimum balance, minimum pay and salary transfer conditions are imposed. Unlike other online-based accounts, eSaver customers also get six free over-the-counter withdrawals in a month.
HSBC is one of the three banks surveyed that don't set a minimum salary requirement for its chequing facility, the Current Account, although a Dh3,000 minimum balance is still required. Cheque users can remotely transfer funds up to Dh1 million between HSBC UAE accounts. A chequebook of 25 leaves is issued free, while subsequent cheques are charged at Dh25 per 25-leaf book.
4. Standard Chartered
Standard Chartered has competitive banking products for average earners. The SaveMore package is free of maintenance fees and does not require a minimum salary, maintaining balance or a salary transfer. A customer can earn a maximum of 2 per cent per annum.
The interest rate is compounded daily on the daily ending balance and will be paid to the account on the last business day of each calendar month. The interest is forfeited if the customer makes one or more debit transactions in a month. Customers can withdraw and deposit cash over the counter without charge.
The bank's non-yielding Current Account allows anyone, regardless of salary, to issue cheques, but at least Dh3,000 should be kept in the bank per month to avoid paying the Dh25 low-minimum balance fee. Should you choose to transfer funds from your other account with Standard Chartered in the UAE, no charge will be levied.
5. Emirates NBD
Emirates NBD won't charge any maintenance fees or require a salary transfer, depending on the account type. It doesn't always mandate UAE residents to meet a certain pay criteria either. Its interest-earning Value Account, for instance, is open to anyone regardless of income.
The product doesn't come with any fees and offers interest ranging from 0.25 to 1.25 per cent (as of June). Those who are unable to keep cash in their Value Account won't have to worry as the bank has just scrapped the Dh30 low minimum balance fee. Additional features include free life insurance of Dh100,000, free roadside auto assistance, free medical access card and shopping and dining vouchers.
Customers can also transfer funds to their Current Account online. However, they have to earn at least Dh2,500 a month to qualify for this facility and keep at least Dh3,000 in the bank to avoid low minimum balance fees. Emirates NBD also has a network of 650 ATMs, the biggest among those surveyed, which can be used for free.
Top picks for medium to high-income earners
1. ADCB's Online @active Saver
• Interest: up to 3 %
• Minimum salary: Above Dh5,000
2. National Bank of Abu Dhabi's Current Account
• Interest: none
• Minimum salary to get a cheque book: Dh5,000
• Minimum balance: Dh1,000 (lowest in the market)
3. Noor Islamic's profit-bearing account
Noor Islamic Bank also offers an profit-bearing checking account, but it's been excluded from the list because its savings products either require a salary transfer or a Dh75 monthly subscription in exchange of free services and privileges.
Besides, you need to earn at least Dh10,000 a month to open an income-yielding account. The bank's Dual Account, which is however open to cheque users regardless of their salary, offers .25 to 1 per cent profit rate per annum, depending on the monthly average maintained in the account.
Reap benefits from ADCB and NBAD
For those earning Dh5,000 or more, it may be worth looking at other banks that also offer high-yielding savings accounts and chequing products that require lower minimum balance.
At the Abu Dhabi Commercial Bank (ADCB), savers can earn up to three per cent per annum through the Online @ctive Saver Account. On most of its savings account products, ADCB also offers 0.30 per cent interest per annum, which is accrued monthly and paid half yearly on the monthly minimum balance.
However, while not all savers need to transfer their salary. Customers must earn more than Dh5,000 per month to open accounts with ADCB. They don't need to pay low-minimum balance or maintenance fees, provided they earn Dh30,000 to Dh75,000 a month and transfer their salary, or they have Dh200,000 to Dh500,000 in the bank or a mortgage of $1 million.
Those who either have Dh30,000 total relationship balance or maintain at least Dh3,000 in current, savings or call accounts; or have a mortgage, investment relationship or utilised overdraft with the bank, or have a bancassurance product with a monthly premium of $100, are also exempt from account maintenance and low-minimum balance fees. ADCB customers who keep a monthly average of less than Dh3,000 in any current, savings or call accounts are required to pay the standard Dh25 fee.
If you're looking for a chequebook and you want the lowest minimum balance requirement, your best bet would be National Bank of Abu Dhabi (NBAD), but only if you earn at least Dh5,000 a month.
While most UAE banks require customers to keep at least Dh3,000 in their current account to avoid penalties, NBAD sets a lower threshold at Dh1,000 monthly. However, no minimum salary is required for the Current Account if you don't opt to issue cheques.
The bank also has savings account products that are open to anyone regardless of their salary and does not require a minimum balance. Its Nada account, which is currently available to ladies and students only, offers interest of 0.25 per cent a year, if opened as a savings account. Effective May this year, the bank has also stopped charging service or maintenance fees on current, savings and call accounts.