Dubai: In a bid to attract more deposits, UAE banks have nudged up interest rates for a number of their savings products.
Savers who are looking for higher returns on their hard-earned dirhams can now benefit from profit growths of up to 2.2 per cent per annum. About a year ago, the highest rate available in the market was 1.15 per cent.
Most of today’s higher rates are being offered to customers who sign up for fixed deposits, from three-month to 48-month products.
On average, savings held for a minimum of one year now carry an interest or profit rate of around 1.25 per cent per annum, while a six-month deposit can yield about 0.9 per cent.
“These rates indicate an increase of 25 basis points to 50 basis points as compared to 2015,” said Preeti Bhambri, founder of personal finance site MoneyCamel.com.
With interest rates rising, now may be a good time for savers in the UAE to explore some deposit options. “Higher interest rates offered by some banks on specific deposit types have made it worthwhile for individuals and companies to make deposits with such banks,” Bhambri told Gulf News.
The increase in interest rates can be attributed to tightening liquidity in the financial services industry. The UAE Central Bank had earlier announced a series of two interest rate increases in line with the strengthening of the US dollar.
“In UAE, bank’s liquidity has been affected due to scarce deposits and as such an interest hike is meant to attract more deposits,” Bhambri said.
