What are the Types of Bank Accounts in the UAE

Before you decide to proceed with bank account opening, you want to know, which account types you can open and if there is any specific information you should know, before you decide to move forward.




In general, we can divide bank accounts into two categories: into personal and corporate bank accounts.


As in the rest of the world, you can open an account for yourself as an individual and use it for personal purposes. If you need a bank account for commercial matters, you should note, that a personal account can not be used for business purposes, which means that you need to establish a company and open a corporate account for it. Doing business through a personal account is not allowed.


Earlier, the UAE provided an opportunity to open corporate bank accounts for foreign companies registered outside of the UAE. To date, mostly UAE resident companies open corporate bank accounts in the country, unless a foreign company is able to maintain high balance in the account. Each bank determines independently what balance this should be.


When opening a bank account, you can choose from a current, savings and investment accounts.


Current accounts can be used for day-to-day financial transactions or money transfers. Current accounts include the issuance of a debit card, a checkbook and, possibly, a credit card, provided you are a UAE resident. Accounts can be used to transfer wages, and they can be also maintained in several currencies, such as, USD, GBP, Euro, AED, etc.


Current accounts in the UAE are divided into standard and current accounts with additional benefits. The standard current accounts are those that offer those basic functions that define current accounts as such. Current accounts with additional benefits are current accounts that offer all the standard functions, as well as some additional benefits, such as travel insurance and so on. Added advantages of current accounts vary from bank to bank.


If you are opening a current account for your personal needs, you will have to opt either for a salaried current account, which means that you will need to ensure that each month your salary is being transferred specifically to this account. In case you are a business owner receiving dividends, you will be opting for a special current personal account, where you will be regularly keeping a certain balance but it will also give you a freedom to transfer funds to this account, whenever you deem fit, without the need to do it every month. For personal current account the bank decides independently, what the minimum salary of the applicant shall be, to be able to apply for a current account. It can be as little as AED 3,500 or as much as AED 5,000. If you plan to help your future employees to open thier bank accounts to receive salaries, you shall research, which bank they will be able to apply with, because as we already mentioned, each bank requires a certain minimum wage to allow to apply for account opening. Where the salary is too low to apply for current account opening, companies tend to open savings accounts for their employees.


Savings accounts usually offer higher interest rates than current accounts, but may have limited access to funds, and presume penalties for withdrawals. Savings accounts can offer a fixed or variable interest rate. Savings account can be multi currency and can be opened in dirhams, US dollars, euros and pounds sterling. As we already mentioned it, savings account can also serve to transfer wages to it.


Opening of the personal current and savings account takes up to 3 to 4 working days, and bank details are issued the day after the filing of all necessary documents. Corporate bank accounts opening may take anywhere between 5-6 days to 3 to 4 weeks. We will talk about this in more detail in the following chapters.


Investment accounts generally offer higher interest rates than current or savings accounts, but often access to funds held in these accounts may be limited or unavailable for a certain period of time. In light of this, investment accounts can be inconvenient, if you need regular access to funds.


The opening of the investment account is carried out on the basis of the conclusion of the investment agreement with the bank. The term, on which the contract, varies from 12 months and can go up to 5 to 10 years or more. According to this agreement, you transfer a certain amount of money into your investment account opened with the bank, and the bank, in turn, manages your portfolio and invests in various financial instruments, allowing you to earn from 3 to 7% per annum. The bank's policy regarding the minimum amount of funds invested also varies from bank to bank. While some banks require the introduction of a certain fixed amount at the beginning of each year, other banks require a monthly transfer of funds in a certain amount.


The investment account is not displayed in the Internet banking of the client's current or savings account. This is an intrabank account, managed exclusively by the bank. On a quarterly basis, the bank sends an extract from the investment account for review.


If you are opening a corporate bank account, you will be definitely looking at a current account, as you will use it for day-to-day operations. In case you need a bank account for your personal needs, you will be able to choose from both a current and a savings account, or opt for both from the start. Investment account would be something to consider, if you have savings that you wish to multiply, and receive higher returns on your investments. You shall look at an investment account as a long-term investment, where you will be able to use saved and multiplied funds in the future, once you retire. 


As such, as an individual you can open a current and savings acconts, as well as opt for some investment plan. As a company you can apply for a current account or additionally invest in bonds or other financial instruments.


In the next chapters, we will have a closer look at minimum balance requirements, talk about cheque books, review requirements for account opening and share with you other important information with respect to corporate banking. 


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 Disclaimer: Business Boutique UAE-Consultants.com is not affiliated with any particular government or legal entity. Business Boutique does not give professional legal advice nor any other professional advice subject to a public office in the government. This article merely sets out a simple and basic idea as to the reasons of Dubai freezone company setup and Dubai free zone company formation cost. Business Boutique in no way holds nor imposes any official governmental or legal authority and the article herein is only to be taken as a guide. All further governmental or legal issues should be addressed to the corresponding authorities.

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