Financial Experts recommend investing your short-term savings to make your finances secure in the future. Chris Keeling, a chartered financial planner says that many people deposit their savings in basic bank accounts where little or no interest is implemented, reducing investment growth.
Instead, try out these ways where you can secure your future by investing in short-term savings.
High-yield Savings Accounts
High-yield savings accounts are offered in both online and traditional baking ways providing better ways of savings. These accounts ensure higher interest rates, providing easy access to funds, ATM access, low fees, and mobile banking app.
However, the interest rate mentioned can be only for a specified time and might change after that. In addition, the rate can be variable or fixed, so the interest users must have all the information from the bank before going for this option.
Fixed Deposits and Certificates of Deposits
Fixed deposit accounts are time accounts where you can deposit a specific amount for a fixed time period. In return, the individuals will earn a fixed interest rate, generally higher than other regular saving accounts.
Certificates of Deposits are another way where the deposit is time-bound, however, you earn a higher interest rate.
Mr. Keeling, the chartered financial planner says that banks have different ranges of terms spanning from 1 month to more than a year for these deposit accounts.
National Bonds
National bonds are another special savings and investment program in UAE. Applying in National binds, you are considered in draws where you can win exciting prizes which can be higher than the interest you gain from regular accounts.
Government bonds or Treasury bills
Government bonds and treasury bills are low-risk investment options as they are backed by the government. Through government bonds or treasury bills, the investors make loans to the government which are issued to raise funds.
These are short-term with maturities of less than a year. Interested individuals can purchase maturities from a broker or government directly. Both options provide competitive interest rates and is a favorable way for those who want a secure method.
Short-term Bond Funds
Short-term bond funds are a little risky as you will invest in fixed-income securities with short maturities. The return potential is higher than regular savings accounts however, it has its own risks. Therefore, choose a way with a solid record and reputable management.
Money Market Funds
This is a mutual fund investment option where you invest in short-term securities like fixed deposits, T-bills, and commercial paper. This is a preferable option for people who want stability, convenient access to funds, and higher earning.
You might want to consider these ways to make your savings a way to finance your future in UAE.
