Second salary in UAE: Invest as little as Dh1,000 per month to earn additional income

UAE residents can earn a ‘second salary’ by investing a minimum of Dh1,000 per month for at least three years, with a new scheme launched recently. Announced by National Bonds, simply put, the savings plan allows customers to save monthly for a duration they choose, and receive an income at the end of it.

“One of the key advantages is the ability to choose a preferred tenor and enjoy a competitive expected profit rate reinvested monthly for the entire duration of the customer tenor,” Mohammed Qasim Al Ali, Group CEO, National Bonds, told Khaleej Times in an exclusive interview.

Essentially, there are two phases to the Sharia-compliant scheme: Saving — where customers invest for the duration they choose (3 to 10 years); and income — where they draw their monthly income (principal plus profit) at the end of the saving period.

“Customers save monthly for a period ranging from 3-10 years, after which they can enjoy the accumulated profit with monthly reinvestment based on their chosen period of time,” said Al Ali.

He illustrated the scheme with an example: “For instance, if a customer saves Dh5,000 monthly during their savings period, where profit is reinvested monthly, then they can receive Dh7,500 distributed over the duration of the income period.”

In other words, the income is distributed evenly with the profit added on every month.

After choosing the investment period, subscribers can also choose the period during which they wish to receive the income. For example, customers can choose to save Dh5,000 per month for five years.

At the end of it, they can choose to get the income over three years instead of five. In this case, “they could take home a monthly amount of Dh10,020 for three years – more than double the monthly savings”, according to National Bonds.

Subscribers can also choose to redeem their savings as a lump sum instead of monthly payments.

Withdrawing early

When asked what happens if a subscriber isn’t able to complete all the investments over the chosen duration, Al Ali explained: “In line with the core of all National Bonds offerings, Second Salary is also an extremely flexible product. Customers have the option of early redemption of both their principal and profit.”

30 times more chances of winning Dh1 million

Under the Second Salary plan, UAE residents will have the chance to win rewards and cash prizes from National Bonds.

“As customers’ savings tenor progresses, they continue to earn highly competitive profit rates and get up to 30 times the chances in our Dh35 million Rewards Programme draws,” said Al Ali.

The rewards range from Dh1 million to 16 luxury cars and various bond prizes. “There are exclusive prizes for Emiratis and Expats, including two grand prizes of Dh1 million every quarter, plus more than 423,000 prizes per year, with dedicated prizes for ladies, minors and, regular savers. That’s Dh35 million in rewards to be won every year.”

Ensuring stability

During times of economic uncertainty globally, especially after Covid-19, financial stability and retirement planning have become a major concern for expats more than ever.

“Second salary is a stable way of securing future income in difficult market conditions. This carries a strong message to customers about the secure and safe investment that preserves their savings and gives them returns that will be vital for their families in the future,” said Al Ali.

Other savings schemes

National Bonds started its retirement schemes in October 2022 with the Golden Pension Plan as a corporate investment programme. It encourages employers to invest the accumulated end of service benefits from or on behalf of their employees.

“Retirement planning is a top priority for us as it is a subject of interest to a wide range of people,” said Al Ali.

“For example, after launching the Golden Pension Plan, there was a big interest in the new scheme. We partnered with Dubai Taxi Corporation (DTC) at the Dubai Roads and Transport Authority (RTA) … More than 9,000 drivers can leverage the National Bonds platform to grow their hard-earned funds efficiently and enjoy a range of exclusive benefits.

The best part is that even small companies with much fewer employees are also registering with us. The scheme helps employees of registered corporates get a head-start in growing their end-of-service benefits as part of their retirement planning.”

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