Interest Rates from Around the world, who has it best?
We’ve all heard the old saying about savings accounts - that you’re better off storing your money under the mattress. However, you may find that there are actually some surprisingly good interest rates on offer around the world. Did you know that different countries pay substantially different rates on your savings? Here is how it works.
Interest rates are set by the leading central banks in each country or in the case of the EU, for the whole Eurozone area. Interest rates are dependent on many things such as the state of the economy and forecasted growth. As many countries find themselves in different economic cycles, this means their interest rates change accordingly. The European Central Bank is still maintaining a flat rate of 0%. Might just leave that box of cash under the mattress!
The UK is just slightly more at 0.75%. Not a great return on your savings to be had there. Move across the globe to Australia and you’ll find the rates are double at 1.5%. More promising. Meanwhile, in contrast, the United States Federal Reserve (US Central Bank) has been edging rates up for some time - which is good for savers, not so great for borrowers!
As The National reported in December 2018, the most recent rate hike from the US Fed has seen the UAE Central Bank also raise interest rates, as the UAE Dirham is pegged to US Dollar. So good news for the UAE savers. As so many people come to the UAE to save money for the future, this will help them grow their money faster.
As of 19th February 2019, rates rested at 2.25% by the Central Bank of the UAE and other Arabian Gulf regulators. That’s a very promising outlook for Saver’s in the UAE.
It’s not simply the interest rate you need to consider, but where is the best place to hold your savings. Many governments will tax you on the interest you earn on your hard earned savings. This is the case in the UK, Australia, India and USA. In Dubai, Abu Dhabi and across the UAE, you don’t pay tax on your savings interest, so this is a good place to start. If you’re looking to save in the UAE, do your homework. You can typically expect rates to vary from 1% to 4%, which is quite a gap, depending on how long you want to save for, the currency you place your funds in and how frequently you want access to your money. A simple comparison of UAE savings accounts will show that CBI offers a whopping 4% annual return on a Fixed Deposit account (subject to terms and conditions), the highest we can find in the UAE at the time of publishing. Comments are very welcome if you can find a better return on your money! For earning the 4% rate, funds need to be placed in a fixed deposit of a minimum 37 month term!
So you’ve done your research and you’re ready to take that stash of cash under the mattress and put it to work. CBI’s competitive Fixed Deposit Account gives an impressive return with a minimum deposit of AED 10,000 available in various deposit terms. Find out more here.
Last but not least, don’t forget that the currency you save in makes a big difference. Make an informed decision and choose an account that gives you the best interest rate out there.
Now’s the time to take advantage of these fixed rate deals, when the rates are in your favour as a saver. For a little research you can increase your interest percentage by as much as 3% with some really good interest rates on offer. Much better than under the mattress!