Latest news with #Dh15.8
Hi Dubai
18-03-2025
- Business
- Hi Dubai
UAE Residents Opt for Longer-Term Savings as Interest Rates Set to Decline
With interest rates expected to drop in line with the US Federal Reserve's anticipated cuts, UAE residents are increasingly opting for long-term savings to secure higher returns. Financial institutions have reported a surge in deposits as savers seek to lock in current high yields before they decline. 'People are choosing longer saving tenures, between three and 10 years, through products like our Millionaire product, Second Salary, and Booster schemes. They know rates will eventually drop, so they prefer securing returns of 3.5% to 4% for the next four to five years rather than renewing deposits annually at lower rates,' said Mohammed Qasim Al Ali, Group CEO of National Bonds. Shariah-compliant financial institutions offer profit rates instead of interest, attracting depositors looking for stable, risk-free returns. National Bonds' Second Salary savings programme allows residents to save from Dh1,000 per month with flexible tenures. Savings culture is growing across income levels, with National Bonds reporting a 51% increase in regular savers and 45,800 new customers in 2024. The company's investment portfolio surged to Dh15.8 billion, marking 22% growth. Customers earned up to 4.75% returns, benefiting from high interest rates. The company is also integrating AI-driven financial planning tools, including a robo-advisor to guide customers on savings strategies and debt management. Digital savings increased by 41% in 2024 due to these innovations. Additionally, National Bonds plans to expand its real estate portfolio with a new office tower in Barsha Heights by 2025. With economic conditions shifting, UAE residents are strategically positioning their finances, prioritizing structured savings to maximize returns before the anticipated interest rate cuts take effect. News Source: Khaleej Times
Khaleej Times
18-03-2025
- Business
- Khaleej Times
UAE: Why residents are opting for longer saving deposits with banks, schemes
Residents in the UAE are increasingly opting for longer saving deposits with banks and saving schemes. Reason: They want to cash in on high returns amid high interest and profit rates before they begin to decline. 'People are now opting for longer periods of saving products, which we offer through our millionaire product, the Second Salary, and also the Booster products, where we offer between three and 10 years of investments. "Everybody knows that the rates will start going down as it is only a matter of time. So they want to lock yields from now. They're now getting three and a half to four per cent return for another 4-5 years. Therefore, they're better off than renewing it in the financial institution year by year, because they'll get less returns,' said Mohammed Qasim Al Ali, Group CEO of National Bonds. Significantly, interest rates in the UAE are expected to drop this year in line with the US Federal Reserve. Analysts expect the Fed to cut rates twice this year. Instead of interest rates, Shariah-compliant banks and financial institution, therefore, offer profit rates to depositors. Under National Bonds' Second Salary saving programme, residents can start saving with Dh1,000 a month. They can choose a tenure of 3 to 10 years and earn strong returns. ' More people have now started looking at the savings journey not as an obstacle but as an enabler to reach their financial goals. So there is a huge psychological shift that we have seen. Secondly, because of the high interest rates, people now prefer to place their savings in deposits across the banking system and National Bonds because of the high returns that they get almost risk-free,' Al Ali told Khaleej Times in an interview. He elaborated that savings are gaining momentum across low, middle and high-income classes. Up to 4.75% return The Sharia-compliant savings and investment company on Monday announced that bondholders earned up to 4.75 per cent in returns on their savings in 2024, as customers benefited from high interest rates. National Bonds witnessed a 51 per cent increase in regular savers in 2024. It added 45,800 new customers last year, underscoring heightened interest in structured savings. Its investment portfolio surged to Dh15.8 billion in 2024, achieving 22 per cent growth over the past year. The company is also exploring to expand AI-enabled solutions that will interact with the customers. 'For example, we are exploring now robo advisor, whereby customers can enjoy talking to an AI-enabled solution whereby they give them advice on how and where to save, how to diversify their portfolio, how to reduce their debt.' The integration of AI-driven automated financial planning tools led to a 41 per cent increase in digital savings last year compared to 2023, it is a.d Al Ali added that the company will launch an office tower in Barsha Heights in 2025 to expand its real estate portfolio.
Khaleej Times
17-03-2025
- Business
- Khaleej Times
National Bonds' investment portfolio surges to AED15.8 billion with 22% growth in 2024
Investments by sukuk holders at National Bonds reached a record level of Dh15.8 billion ($4.2 billion) by the end of 2024, reflecting a growth of more than 22 per cent compared to Dh12.9 billion at the end of 2023. According to National Bonds, this growth is linked to the increasing number of regular savers and the adoption of digital solutions. The company distributed approximately Dh588 million in returns to sukuk holders for the year 2024, with some savers earning up to 4.75 per cent, while the overall average return rate stood at 4.02 per cent. The annual results of National Bonds, announced on Monday, showed a 51 per cent increase in the number of regular savers, highlighting the growing demand for structured savings plans in the community. This trend aligns with the UAE's vision of enhancing financial well-being among individuals and institutions while striving for long-term sustainability. National Bonds emphasised that the development and upgrade of its mobile application last year contributed to a 41 percent increase in digital savings in 2024 compared to the previous year. Al Ali said that the company maintains a low-to-medium risk strategy to ensure capital protection. With the global rise in interest rates, the company increased its bank deposits to 20 per cent in 2024. Additionally, 30-40 per cent of the investment portfolio is allocated to fixed-income assets, 10-12 per cent to listed equities, 8 per cent to private equity investments, and 20 per cent to real estate, which includes ready properties, real estate development, and investment portfolios. In 2024, National Bonds became one of the first companies to offer end-of-service benefits programmes in partnership with the Ministry of Human Resources and Emiratisation (MoHRE). The programme is set to launch this year, with the company actively engaging with employers seeking optimal financial returns for their employees. Mohammed Qasim Al Ali, Group CEO, said: 'At National Bonds, we take a proactive approach to understanding the future needs of individuals and businesses. By carefully assessing emerging trends and customer expectations, we are able to create products and solutions that align with the financial landscape of tomorrow. This foresight has contributed to a 22 per cent year-on-year growth in our investment portfolio, while the 51 per cent increase in regular savers reflects the confidence our customers place in our offerings. We focus on building a future-ready savings ecosystem that not only meets financial needs but also addresses the psychological barriers to saving, empowering customers to adopt positive saving behaviours with confidence.' He further emphasised that the company's approach is not solely financial but also focuses on savings behaviours and motivations. The annual rewards programme, worth Dh36 million, along with other tangible incentives, aims to inspire a disciplined saving culture.
