5 Low Risk Investments in the UAE

People are not the same when it comes to risk appetite; some people have no issues taking high risks to get high returns, while others are happy with lower returns as long as they don’t expose their capital to higher risks.

We need to admit that there is no risk-free investment. Even if you put your money with the biggest and most financially solid bank in the world, there is still a tiny chance of this bank running through financial troubles, hence giving you a hard time getting your money back.

Risks associated with investing in UAE are very similar to any other country. Investments have different risk levels, and you need to be careful choosing the best investment that suits your risk profile.

However, in this article, we will discuss some of the most common low risk investments in the UAE.

1. UAE National Bonds:

National bonds are one of the safest and most affordable investment options in the UAE. The company is totally owned by the Government of Dubai.

You can buy national bonds with as little as AED 100. National Bonds have multiple safe investing options, and they have delivered decent returns over the past years.

How to invest: visit the company website and view the different investment options

2. International Government and Corporate Bonds:

Similar to UAE National Bonds, US and international governments and corporates regularly issue bonds when they need financing. Bonds have the following standard features:

Maturity date

Each bond has a specific pay-back date that the issuing government or corporate promises investors to pay them back.

Coupons

Bond coupon is the interest that the holder gets monthly, quarterly, or annually, depending on the bond type.

Investors could profit from bonds either by waiting until maturity and getting the coupons or selling the bond in the secondary market before maturity if that bond prices went up.

How to invest: People in UAE can access the US and international bonds through financial advisors or open a brokerage account in one of the brokers that provide access to international bonds such as Saxo bank or Swissquote.

check out our recommended list of Financial Advisors

3. Fixed Deposits in UAE Banks:

UAE banks pay an interest in exchange for keeping your funds in the account without withdrawing them for a certain amount of time.

Unfortunately, interest rates have been low for a couple of years in UAE and globally; therefore, you can’t expect to get more than 1% on your fixed deposit in most of the banks.

Fixed deposits are one of the safest investments in the UAE. The only risk that you won’t get your money back is the bank gets bankrupt, which is unlikely to happen.

How to invest: contact your bank to check the fixed deposits rates they offer or search for websites that provide UAE banks interest rates comparison.

4. High-Yields Saving Accounts in UAE Banks:

Savings accounts in UAE banks and off-shore offer a modest return on your money. Most banks saving accounts offer less than 1% interest. 

However, it’s a better option than leaving your money with no interest in current accounts.

To get the best interest rates, always search for digital banks. This type of banks run most of their operations using artificial intelligence and chatbots; therefore, their operating cost is low. They can afford to provide high interest on saving accounts.

For example, Liv bank is a digital bank owned by Emirates NBD pays an interest rate of 1.5% per annum for a saving account, which is considered very high compared to other banks in the UAE and even globally.

How to invest: contact your bank to check the saving accounts rates they offer or search for websites that provide UAE banks interest rates comparison.

5. Money Market Mutual Funds:

Money market funds are pools of CDs, short-term bonds, and other low-risk investments grouped to create diversification without much risk and are typically sold by brokerage firms and mutual fund companies.

Money market funds hold much lower risk than other mutual funds since they invest in very low-risk financial instruments.

How to invest: You can access Money market mutual funds from the UAE through financial advisors. They have a vast range of funds that suits each investor’s goals and risk profile.

Check out the list of our recommended financial advisors.

Bottom Line:

There are many investment options in the market; each comes with its unique risk and return. It’s very important to do your diligence and choose the investment you believe gives you the return that satisfies you with an acceptable level of risk.