Dubai: Starting on April 1, National Bonds will charge a Dh20 minimum balance fee per month on accounts with balances below Dh3,000.
In its notice sent to customers this month, the company said the new levy will apply to Sukukholder accounts. “[Twenty dirhams] will be charged as minimum balance fees on first of every subsequent month and transferred to the benefit of joint investment pool,” according to the note.
The new policy initially drew some negative reactions from UAE expatriates who maintain accounts with National Bonds. William Manuel (name changed), also a National Bonds customer, said the new policy might discourage low-income savers from putting their money in bonds.
“The customers with less than Dh3,000 investment are mostly blue-collar workers, helpers, labourers, who can barely save. How can you encourage them to invest if you are charging them for investment? They earn a meagre salary and can hardly save,” he said.
Ahmed Bibars, executive director for retail and distribution at National Bonds, clarified that the move is intended to encourage savers to keep their accounts active, and to ensure they qualify for the regular draws. The fee is also not applicable to customers who opt for a savings scheme..
"At National Bonds, our ultimate goal is to encourage a habit of regular savings among our bondholders. Only savers with a minimum balance of Dh5,000 and above are eligible to enter our regular draws," he said.
"However, we find some accounts with money lying idle with no effort from customers to top up their accounts in an attempt to save more," Bibars told Gulf News.National Bonds, however, clarified that the new levy will be waived to customers who have signed up to invest a fixed amount in “Saving Sukuk” through a recurring payment method. In particular, those who opt for the "myPlan" savings scheme are exempted from the new fee.
The company has a "myPlan" programme that allows customers to set aside small amounts, or as little as Dh100 each month. Customers under this scheme are supposed to contribute on a regular basis and are exempted from the minimum balance levy.
"This scheme not only grants savers a waiver on the minimum balance fee, it will also make them eligible for all draws including Dh1 million, BMW car, Dh10,000 cash award and many more," Bibars clarified.
The new terms and conditions were revealed when National Bonds announced the distribution of returns to bondholders for 2015. The sharia-compliant savings and investments company said that its savings and investment products provided up to 4 per cent annualized returns to customers in 2015, outpacing the returns provided by other financial institutions in the UAE.
The company maintained that more people are opting to put their money in bonds, with the number of National Bonds “regular savers” registering a growth of 82 per cent in 2015 compared to 2014. “The company recorded a strong performance in 2015 with more UAE nationals opting to save via the “myPlan” regular savings programme.”
