Category Archives: Save

National Bonds revises profit calculation methodology

The National Bonds has revised profit calculation methodology for bond holders with effect from 1st January 2011. The revised calculation will be based on a weightage on term of investment. With the new methodology, the longer your savings & investment period, the higher will be your share of profit. As per the present method, no weightage was given for the period of holding and the bond holder was entitled to the profit at the same annual rate.

With revised system, the bonds will be categorised into four tiers based on the length of their investment.

Tier 1: Bonds invested for less than 3 months – entitled to 40% of annual rate of profit. If the annual rate is 6%, Tier 1 Bonds will get only at annual rate of 2.4%

Tier 2: Bonds invested for 3 months and less than 6 months – entitled to 60% of annual rate of profit. If the annual rate is 6%, Tier 2 bonds will get only at annual rate of 3.6%

Tier 3: Bonds invested for 6 months and less than 1 year – entitled to 80% of annual rate of profit. If the annual rate is 6%, Tier 3 bonds will get only at annual rate of 4.8%

Tier 4: Bonds invested for 1 year or more – entitled to 100% of annual rate of profit. If the annual rate is 6%, Tier 4 bonds will get the full 6%

If you invest in the middle of the year and stay till the next profit announcement, then you will automatically be paid the profit for the interim period based on the Tier 4 weightage. However if you leave before completing 1 year after the announcing of the profit (1 year from the date of investment), your profit will be recalculated based on the actual Tier and any excess distribution of profit will be deducted from your bonds.

The National Bonds is a national savings scheme of UAE. It gives the flexibility and liquidity of a savings account and a return that mostly match with that of a fixed deposit of banks.  You can deposit as low as Dhs. 100 and can withdraw any time and any portion of investment after one month. Profit is distributed at the end of the year only. The weekly prize draw is its main attraction. It distributes cash prizes ranging from Dhs. 100 to 10,000 to 5,135 winners and a monthly prize of Dhs. 1 million to one winner. The bond holder is also automatically entitled for an Islamic life insurance cover (Takaful).

For more information:$Common/images/FAQE.pdf$Common/images/profitE.pdf

You don’t have to get poorer!

‘The rich get richer and the poor get poorer’ – this is a catchphrase that people often use to criticize uneven economic development. It may be a fact though. I am not going to write a scholarly discussion on the economic theory here, but just to discuss from a common man perspective how does it happen!

How do rich get richer? If you have one million and deposit in a bank fixed deposit at a rate of 5% per annum, it becomes 1.28 million in five years. When you have one million you will be able to invest in shares which will give you better return. When you have one million you will be able to invest in real estate or rental property which will give you regular rental income besides capital appreciation. You will be able to start a business or invest in a business which may again multiply your wealth. This is how rich becomes richer! It is only natural and there is no meaning in complaining about it.

So it is obvious that the rich get richer. Does it mean that you have to get poorer? How does it happen? You spend on what you can’t afford. When you try to imitate others, you fail to recognize that others do it because they can afford it after saving enough to build their wealth. You take loan to spend and pledge your future income for present luxuries, while others save from their present income for the future expenses. You pay interest while others earn interest. You misunderstood that living the life means spending on luxuries! You go behind ‘get rich quick’ schemes and lose everything. Yes, it is you who make you poorer.

So how to avoid becoming poorer? First thing that you need to do is live an affordable life. Keep yourself away from debt. Never pledge your future income by taking loan to meet present expenses. Keep a portion of income as savings – treat it as a necessary and unavoidable expense. Understand that there is no quick way or short cut to make money – It needs years of hard work. Realise your hidden potential, polish the skills that you already have and find some way to generate additional income.

Warren Buffet, the self-made billionaire

Rich made their first million by sweating, by doing their hard work, going that extra mile, deferring their gratification. Read about any rich people, there is a hard work behind them – at least by their parents or grandparents. Warrant Buffet, one of the top five world billionaires, has gone door to door selling chewing gum, soft drinks or magazines. He has worked in grocery shop. Every rich has a beginning from the low.

I know there are people who get rich by unscrupulous methods. I know there are poor people who are in trouble too deep to come out of it themselves. Forget about the former, they can’t enjoy their life too long peacefully. Help the later, it will help you to live peacefully rest of your life.

Fixed Deposit with Islamic Banks in UAE

Fixed deposit is one option if you need to park your savings for a shorter period, say a year or less. Fixed deposit is for a fixed period from one month to one year or even more. Conventional banks offer a fixed interest rate which varies based on the duration. Islamic banks in UAE give better return compared to its counter part in the conventional banking sector. The rate with Islamic bank is not fixed upfront, but it is declared at the end of a fixed period which is mostly every three months.  It is a profit rate which is derived from the profit they make from the investment of your fund. The profit earned on the fund is shared between bank and the depositors in a fixed proportion and the share of depositor profit is distributed among depositors periodically. Recently more and more conventional banks are offering Sharia compliant deposits and investment products.

Profit rate declared for the quarter ended 31st March 2010


1 month

3 months

6 months

9 months

1 year

Dubai Islamic Bank 3.00% 3.05% 3.10% 3.15% 3.25%
Emirates Islamic Bank N/A 3.26% 3.35% 3.53% 3.80%
Mashreq Al Islami 1.82% 3.28% 3.77% 4.25% 4.49%
Noor Islamic Bank* 3.00% 3.40% 3.65% 3.60% 3.80%
ADCB Meethaq 2.47% 3.60% 4.08% N/A 4.70%

* Noor Islamic Bank rate is as declared for the month of April 2010

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“I SAVE & I WIN” promotion from National Bonds

The new promotion ‘I save, I win’ announced by National Bonds gives away exciting prizes including Blackberrys,  iPhone,  iPads, Gold Coins and Gold Bars with a grand draw for 1 Kilo gold in addition to the regular weekly draws for bonds which is cashable immediately . National Bonds is the sharia compliant national savings scheme of the UAE that provides a profit based annual returns besides weekly prize draws!

The promotion runs from 5th May to 31st July 2010. There will be three draws for this promotion prizes on 29th May  and 26th June  and 31st July 2010. The grand draw for 1 kilo of gold will be on 31st July 2010. There will be a total of 163 prizes comprising Blackberry 9700 (30 numbers), iPhone  16GB (30 numbers), iPad – 16GB (60),  30 grams gold coins (30) and 100 grams Gold Bars (12) to be given away in three draws plus 1 kilo gold in grand draw.

To be eligible for the draw for Blackberry and iPhone, there should have a minimum savings in bonds of AED 1,000, for iPad AED 5,000, for 30 grams gold coins AED 10,000 and for 100 grams gold Bars AED 15,000 and for the grand draw of 1 kilo gold, minimum savings required is AED 25,000.

Prizes can be exchanged for National Bonds Savings certificates at the same value of the prizes.

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Save with National Bonds

More on Savings

Save with National Bonds

National Bonds gives a rare opportunity to keep their savings in a Shari’a compliant savings scheme with a minimum investment of just Dhs. 100 which makes it attractive to any one!


Investment in National Bonds can be withdrawn over the counter at any Emirates Islamic Bank branch up to Dhs. 10,000 a day. Any withdrawal application above Dhs. 10,000 will be processed within 3 working days


Under the new format, there will be 5,135 prizes every week, which will be distributed across different prize categories – 5 prizes of AED10,000, 10 prizes of AED 5,000, 20 prizes of AED 1,000, 100 prizes of AED 500 and 5,000 prizes of AED 100. Bondholders with a minimum of AED 3,000 or more savings will be eligible for the AED 1 million draw while all bondholders regardless of their savings amount are eligible for all 5,135 weekly prizes. During 2007 and 2008, National Bonds distributed profit to bond holders at the rate of 6 to 7% per annum and for 2009 it was 3.54%.


The government of Dubai holds a 50% ownership in the company through Investment Corporation of Dubai and the main shareholders are Dubai Holding Company, Emaar Properties Company and Dubai Bank. It is licensed and regulated by the Central Bank of United Arab Emirates. However the deposit is not guaranteed.


Opening of an account is very simple with minimal paper work. Any one can just walk in to a participating money exchange or bank, fill a form and deposit the amount. Copy of any identification documents is required.

Sharia Compliance

The National Bonds Mudaraba has its own Fatwa and Shari’a Supervisory Board to hold the responsibilities of directing, supervising, and scrutinizing to ensure that all aspects of the business and investments that the company is carrying out are Shari’a compliant. The board is led by Dr. Hussain Hamed Hassan, who also chairs the Fatwa and Shari’a Supervisory boards of several major Islamic financial institutions, both local and foreign.

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Spend or Save?

My uncle once said, “Nobody will see 100 Dirhams kept in the pocket, but if you buy a shirt and wear it.”

If asked why do you work, the answer will be to make money. Have you ever thought yourself why do you make money? Do you earn and save for the sake of making more money? It shouldn’t be so, really.

The answer can be ‘for living’. Yes we make money for living. Then why do we save? For living in the future! Spend to live now and save to live in the future! That means we should not compromise one for the other! Living the present forgetting the future and saving for the future forgetting the present – both are wrong, isn’t it? We save because we are uncertain if the future earning would be enough to meet the future expense. Same way we are uncertain if we will be alive for next ten years, or next one year or even for tomorrow. So the game is to balance between spending and saving!

Finally remember one thing! We are not here just for living our life! Have a purpose of life!