Credit needs to be given to the turbulence in the world bank markets for spurring Islamic lending in the past few years. The loan growth in UAE in the past 12 months was measured at 8.2%, outpacing the deposit growth at 2.2%. This is as per central bank data published at the Business Week. Investors too have a chance to capitalize on the current situation by investing in bank fixed deposits to get higher interest rates. This safe avenue of investing money is easy to get across multiple banks in UAE and the capital. Here are a few tips to get high returns on your fixed deposit in UAE.
Pick The Right Policy
The interest rates for term deposits and recurring deposits may differ across banks. On a generalized basis the interest rates are higher in term deposits compared to recurring deposits. If a certain bank offers you low interest rates, then invest via term deposits in single lots each month to compensate. However in banks that offer stabilized interest rates, the better alternative remains monthly investments via recurring deposits.
Variable Recurring Deposit
This policy is offered by several banks and offers more choice to the investor. You get a chance to deposit a minimum amount each month; however in case you have a surplus amount, you can deposit any amount at any time without any restrictions. This is a good choice if you expect interest rates to go down in the near future, given that they are currently towards the higher side.
This is another great avenue for investing via bank fixed deposits. Reinvestment plans are of such nature that the amount gained gets reinvested without being withdrawn every year and an interest will be earned on the amount reinvested. With this policy the yield on the maturation of a policy would be much higher as compared to the normal rate of deposit.
Go for Auto Renewal
If you aren't good at keeping a tab on your personal accounts, after its maturity you can opt for this feature. Post maturity several investors fail to renew the bank fixed deposits and stand to lose their interest rate. To avoid such a situation, an auto renewal option is a great tool, since it will get renewed after the period of maturity automatically.
Apart from the above, you can look for ways to avoid paying too much TDS since it can cut into your interest rate. This is a great option for investors whose income has not exceeded the tax limit.