Have some extra money at the end of each month? We take a look at what investments could work for you?
With zero income tax on your earnings, many people living and working in Abu Dhabi have the luxury of being able to save money each month that they would not have been able to in their own countries.If you’re keen to invest your cash surplus here in the UAE rather than sending it home each month, we look at a few options open to you.
National Bonds
Set up in 2006, National Bonds is a Sharia compliant savings scheme designed to encourage both Emiratis and expats to safely invest their money. Each bonds costs AED 10 with a minimum purchase requirement being AED 100. With National Bonds you save and also receive yearly profits and the chance to win thousands of rewards each year. The reward scheme was recently revamped offering more chances to win more regularly. Your bonds can be redeemed at any time with no charges made. There are currently 690,000 bondholders and cumulative annual returns have averaged 5.6 percent from 2006 to 2012 although last year’s profits dropped to 1.5 percent. For more information visit www.nationalbonds.ae.
Financial advisers/wealth management companies
There are multiple wealth management companies and financial advisers across the UAE eager to provide investment advice. While the vast majority offer sound and legitimate recommendations and opportunities, it is always advisable to carry out due diligence and check on exactly who you are dealing with and entrusting your money to before taking out long-term financial commitments. A simple internet search of wealth management in the UAE will list hundreds of companies. Dhilan Vithane from wealth management company One Middle East in Abu Dhabi, said: “We look at what the client wants to do with their money, their aspirations for the future, their attitude to risk and their time frame. We review their situation, identify what they are after and offer unbiased and impartial advice. We range in a variety of investment solutions from medium to long-term savings, structures that will help protect and get inflation level and above returns on cash positions sitting idle in bank accounts to unlocking frozen pensions and allowing the client to take more control of them.”
Stocks and shares
Expats are allowed to buy shares listed on the Abu Dhabi Securities Exchange in a range of companies in various sectors such as banking, real estate and construction where your money will track the performance of the company you have invested in. You need to go through a broker or a bank to make a deal. Sebastien Henin, from The National Investor, a leading Abu Dhabi-based investment management and advisory firm, said: “The global financial crisis in 2008 saw a freefall with the market losing more than 50 percent of its value. However it has been fairly stable since then and from the beginning of the year the market has risen by 15 percent. The average dividend yield is currently a healthy five percent. Brokerage fees are very limited and a full list of companies that you can invest in are available on the Abu Dhabi Stock Exchange website. (www.adx.ae). You can also invest with an asset manager who will diversify your investments through a selection of chosen funds.”
Banks Savings Plans
Many banks encourage savers to invest their money with them by offering not only interest payments, but also schemes that offer cash prizes each day, week or month. First Gulf Bank runs a savings plan that offering FirstSavings Certificates, which is a unique savings programme that ensures guaranteed interest on your savings and gives you a chance to win prizes throughout the year. With no lock-in period, no entry and exit fees, the savings programme also rewards you for saving on a long-term basis. Savers are automatically entered for five daily prizes, 1,916 monthly prizes and a quarterly prize of AED 1,000,000. There are hundreds of different accounts, funds and schemes to invest your money in with international and local banks that will need some thorough research before deciding what best meets your needs.
