Image Credit: Gulf News Archive

Tired of getting a paltry interest rate on your savings account? Savers in the UAE can now have the opportunity to earn a higher return on their money.

Mashreq announced on Tuesday that they are offering a 4 per cent interest on its new savings product, the highest so far in the market today.

Through the Mashreq Insure+Saver, customers can earn a 4 per cent growth per annum on their deposit.

“This represents the highest interest rate investors can currently find in the market,” the bank said in a statement sent to Gulf News.

According to Tooran Asif, head of personal banking at Mashreq, the new product is “the right opportunity” for people to “make a prudent investment decision and to ensure that 2015 will be a financially rewarding year.”

“No other bank in the whole of the UAE can offer such a return,” Asif added.

The catch, however, is that savers need to keep their money in a fixed deposit for at least three months and invest an equal amount in the bank’s insurance savings plan, which is also expected to yield returns.

There is also a minimum amount of deposit required. Savers need to set aside $25,000, or a little over Dh91,000 for the fixed deposit, plus the same amount for the insurance savings plan.

"The deposit amount is guaranteed 4 per cent per annum for three months. The savings plan will yield returns that the underlying funds generate. They are subject to market risk," a spokesperson told Gulf News.

Another catch is that the 4 per cent interest is fixed for only three months, so the money is not guaranteed to earn the promised interest for the whole 12 months or longer.

"On maturity of the deposit, the rollover will happen at normal rates. Customers can continue with the deposit, but the interest rate will be lower," said the spokesperson.

Money experts said UAE banks hardly offer interest rates higher than 1 per cent these days, so Mashreq's offer sounds like a good investment. However, there could be hidden charges involved and returns could not be guaranteed.

"The highest interest offered in UAE for fixed deposits is 1.5 per cent by CBD, followed by 1.4 per cent from ADCB - on a 12-month tenure," said Preeti Bhambri, managing director of personal finance website MoneyCamel.com.

Bhambri said Mashreq's Insure+Saver account is purely an investment product, rather than a normal savings account or a fixed deposit account. She said those who are interested to invest can expect to pay a service charge, adding that there are no guaranteed returns.

"As you know, there is a service charge for insurance-linked plans and no guaranteed returns," she told Gulf News.

Savers have been strongly advised to check the fine print first before signinng up to any bank product and parting with their cash.