Do I need the highest interest rate while handling a money saver account? Well it is not necessary but yes in some of the cases it is. If we have a look at the numbers to determine how much you gain by choosing a bank while dealing through a higher interest rate, it reveals that there would not be any issue or trouble of moving your money. This is a simple formula to maintain or for the growth of your savings that is: if you will put more money in your account, you have more in savings and ultimately the word more matters. But most people keep only a modest or a reasonable amount in savings, so this is not as important as most people have thought about it. So we can say that high rates aren’t as important as banks might lead you to believe.
We will explain it through a simple example like if you keep AED 2,500 in savings, how much higher does the interest rate to care? Assume you’re choosing between two banks, with all other things being equal:
Few important terms about a savings account
We will discuss some of the important terms that are related to your saved items and also helps to understand the accounts.
Annual percentage yield (APY)
This is a simple term but really important and can be defined as APY is the amount you earn on your savings when you take the option of compounding into account. Now what is compounding is another term but we will share it in simple and easy words. Suppose your bank pays interest and you are not taking out your profit then this profit which is actually an interest rate would be doubled. This why APY is a style to get more money through your savings account.
Excess withdrawals
Savings accounts are established and designed to hold your funds or savings for extended periods so that you could benefit in the long run. You can withdraw money occasionally, but frequent withdrawals can be problematic because your interest rate would decrease.
Minimum balance
For a minimum balance deposited to open a bank account in Dubai vary from bank to bank. Some bank doesn’t have any restriction for minimum balance or other requirements. They facilitate the customers either a resident or an expat.
Minimum to earn interest
Well, there is a vast choice of banks so they vary while paying interest at different levels. Read the terms and conditions and pay attention to how much you need to keep in your account to earn the highest rates.
- If you earn an extra 0.25% at one bank, there would be a possibility or option that you would get some higher interest rate from another bank.
- A rate that’s 0.50% higher returns an additional AED 12.50 per year for all kinds of customers.
- If you are looking for some better earning an extra 1% would yield about AED 25 per year.
We will discuss some of the important terms that are related to your saved items and also helps to understand the accounts.
Annual percentage yield (APY)
This is a simple term but really important and can be defined as APY is the amount you earn on your savings when you take the option of compounding into account. Now what is compounding is another term but we will share it in simple and easy words. Suppose your bank pays interest and you are not taking out your profit then this profit which is actually an interest rate would be doubled. This why APY is a style to get more money through your savings account.
Excess withdrawals
Savings accounts are established and designed to hold your funds or savings for extended periods so that you could benefit in the long run. You can withdraw money occasionally, but frequent withdrawals can be problematic because your interest rate would decrease.
Minimum balance
For a minimum balance deposited to open a bank account in Dubai vary from bank to bank. Some bank doesn’t have any restriction for minimum balance or other requirements. They facilitate the customers either a resident or an expat.
Minimum to earn interest
Well, there is a vast choice of banks so they vary while paying interest at different levels. Read the terms and conditions and pay attention to how much you need to keep in your account to earn the highest rates.
