The bank account is probably one of the universal signs of adulthood. In the modern age, it’s impossible to do your job, get paid, and manage your finances without a bank account. The policies, rules, and services available to clients depend from one bank to another or from one country to another. These differences are particularly pronounced in Islamic bank accounts, which don’t work the same way as “standard” bank accounts across the globe. How to open an Islamic bank account and what is the minimum monthly salary to be eligible for one in the UAE? You’ll find out in this post.
Types of Islamic bank accounts
Before we discuss the advantages and other aspects of Islamic bank accounts, it’s important to address different types you can find in the UAE. These include:
- Islamic savings account – funds deposited into these accounts are invested in Shariah-compliant assets, and profits or losses are shared between the account holder and the bank
- Islamic current account – funds deposited into these accounts are interest-free loans given by the account owner to the bank
- Islamic fixed deposit – while riba is forbidden under Shariah, law-making returns on your investment are allowed. The funds deposited into these accounts are used by the bank to buy Shariah-compliant commodity
Advantages of the Islamic bank account
Let’s say you don’t have an Islamic bank account yet and considering opening one. It’s natural to wonder about the advantages you could expect with an Islamic bank account.
Well, it all comes down to the amazing concept of Islamic banking. As you’re already aware, Islamic banking is based on Shariah and follows its principles.
Advantages of opening an Islamic bank account and Islamic banking, in general, are numerous, including the following:
- Based on a profit-sharing principle where the risk is shared by the bank and the client
- Available to all, not just Muslims
- Strong ethical and moral dimensions
- Fairness and transparency
- No speculative transactions
What is the minimum salary to open an Islamic bank account in UAE?
The minimum salary to open an Islamic bank account in the UAE is not the same for every bank. While on average, the minimum salary is AED 5000 in some banks, it can be higher e.g., AED 8000 or as low as AED 3000. Some banks may not have requirements for a minimum or average balance.
What are the eligibility criteria?
The eligibility criteria for opening an Islamic bank account in UAE are not the same for every bank. They vary from one place to another. What all banks have in common is the minimum salary criterion, which we elaborated above.
Other criteria may include:
- 18 (for a savings account) or 21 years (current or salary account) of age
- UAE national
- Resident of UAE
- Applicant must be a salaried employee (for salary account)
In order to open an account, you need to visit the nearest branch. Of course, you need to take documentation to the bank where you want to open the account. The exact documents depend on the type of account you want to open and the bank itself. In most cases these include:
- Completed application form
- Original and copy of passport or Khulasat Al Qaid
- Business-related documents if you want to open the account for your business. These may include commercial registration, business, and trade license, certificate of Chamber of Commerce, just to name a few
Expats can also open an Islamic bank account. They need to provide a passport with a residency visa, a copy of the Emirates ID card of the shareholder representative, disclosure of the source funds, and other documents that the bank may require.
Best banks for Islamic account in UAE
If you’re looking for a bank where you’ll open an Islamic account in UAE, you’re in luck because options are numerous. Some of the best choices include:
- Noor Bank Current Account – minimum balance to maintain is AED 3000. You don’t have to pay monthly and annual fees
- Dubai Islamic Bank Al Islami Current Account – minimum balance to maintain is AED 3000, without monthly and annual fees
- First Abu Dhabi Bank (FAB) Islamic Current Account – minimum balance to maintain is AED 3000 with no Account Opening Fees.
- ADIB current account – minimum balance to maintain is AED 3000, while the minimum salary is AED 8000. There are no monthly and annual fees
- RAKBANK Amal Current Account – minimum balance to maintain is AED 3000
Islamic bank accounts are based on principles of Shariah and are easy to navigate. Some banks require a minimum salary, and the amount may vary from one place to another. Opening an Islamic bank account is easy, and you have access to a full spectrum of services, including internet banking, phone banking, SMS banking, debit card, and others. Many banks have different types of accounts and certain criteria you need to meet.