September 26, 2023

The Second Wage Nationwide Bonds Scheme is a financial savings plan within the UAE that permits you to earn a month-to-month revenue out of your investments. The scheme affords contributors the liberty to decide on their most popular tenor, starting from 3 to 10 years. Throughout this era, financial savings develop steadily, with extremely aggressive revenue charges. The reinvestment of month-to-month returns additional accelerates the expansion of invested funds.

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The longer contributors stay within the Second Wage Nationwide Bonds Scheme, the higher their possibilities (Practically 30 instances) of successful prizes within the AED 35 million Rewards Program attracts. Individuals can improve their probabilities of successful by making common contributions to the scheme. This distinctive function enhances the financial savings expertise by including a component of pleasure and the potential for substantial monetary beneficial properties.

On the finish of the chosen saving interval, contributors transition into the revenue section of the scheme. They start receiving their principal funding and amassed earnings on a month-to-month foundation, in accordance with their chosen revenue interval period. This ensures a gradual revenue stream to assist monetary targets and aspirations.

The SSNBS affords extra advantages to contributors. It gives an inexpensive start line, with a minimal month-to-month funding requirement of simply AED 1,000. Individuals even have the chance to earn a month-to-month revenue, offering monetary stability and extra funds for private or household wants.

All through all the tenor, contributors profit from a aggressive anticipated revenue price of 4.07% p.a., reinvested month-to-month. This ensures constant development and enticing returns on their investments. Upon finishing 3 years within the scheme, contributors take pleasure in the additional advantage of getting the subscription charge waived. This additional will increase the general return on funding, making it much more interesting.

How does the SSNBS work?

The SSNBS is an easy and easy-to-use financial savings plan. To take part, you merely must open an account with a collaborating financial institution or monetary establishment. After getting opened an account, you possibly can start making month-to-month contributions. The minimal month-to-month contribution is AED 1,000.

Your contributions might be invested in a diversified portfolio of property, together with authorities bonds, company bonds, and equities. The precise mixture of property will range relying on the tenor of your funding.

Your investments will develop steadily over time, with the potential to earn enticing returns. Additionally, you will have the chance to win prizes within the AED 35 million Rewards Program attracts.

On the finish of your chosen tenor, you’ll start receiving your principal funding and amassed earnings month-to-month. This ensures a gradual revenue stream to assist your monetary targets and aspirations.

Who’s eligible for the SSNBS?

The SSNBS is open to all UAE residents, together with UAE nationals, expatriates, and college students. There aren’t any age restrictions, and you don’t want to have a excessive revenue to take part.

Is the SSNBS a protected funding?

The SSNBS is a comparatively protected funding backed by the total religion and credit score of the UAE authorities. Your investments are protected by the UAE Deposit Safety Regulation, which ensures the security of as much as AED 250,000 per depositor per financial institution.

Is the SSNBS a very good funding?

The SSNBS is an effective funding for anybody who’s on the lookout for a protected, safe, and rewarding method to develop their financial savings. The scheme affords a number of benefits, together with:

  1. Aggressive revenue charges.
  2. The chance to win prizes within the Rewards Program.
  3. A gradual revenue stream.
  4. Affordability.
  5. Straightforward to make use of.
  6. Safety.

What dangers are concerned on this funding?

  1. Market danger: The worth of your funding might go down in addition to up, so you would lose cash. The Second Wage Nationwide Bonds Scheme is a fixed-income funding, which signifies that the rate of interest is fastened in the course of the funding. Nonetheless, the worth of the bond itself can nonetheless go up or down, relying on market circumstances. For instance, if rates of interest rise, the worth of your bond might go down.
  2. Inflation danger: Inflation is the speed at which costs for items and companies improve over time. If inflation is excessive, the worth of your cash will lower over time. Which means the buying energy of your funding will lower, even when the rate of interest in your bond stays the identical.
  3. Liquidity danger: Liquidity refers to how simply you possibly can promote your funding with out shedding cash. The Second Wage Nationwide Bonds Scheme is a comparatively illiquid funding, which signifies that it could be troublesome to promote your funding rapidly if it’s worthwhile to entry the cash.
  4. Credit score danger: Credit score danger is the chance that the issuer of your funding will default on its funds. The Second Wage Nationwide Bonds Scheme is a government-backed funding, which signifies that the UAE authorities is the issuer of the bonds. The UAE authorities has a robust credit standing, so the chance of default is low. Nonetheless, there’s at all times some danger concerned when investing in any sort of funding.

Charge particulars:

Listed here are some extra particulars in regards to the charges related to the Second Wage Nationwide Bonds Scheme:

  1. Subscription Charge: A one-time charge of AED 100 is charged once you open an SSNBS account.
  2. Month-to-month admin charge: The month-to-month admin charge is charged to cowl the prices of managing your funding. The charge is AED 20 per thirty days.
  3. Overdue fee charge: When you miss a fee, you can be charged an overdue fee charge. The charge is calculated as a proportion of the missed fee. The charge is AED 25 per missed fee.

Preclosure penalty:

The preclosure redemption penalty for the Second Wage Nationwide Bond Scheme is 1% of the excellent principal quantity for annually remaining within the time period of the bond. For instance, when you have a bond with a time period of 10 years and also you redeem it after 5 years, you can be charged a penalty of 5% of the excellent principal quantity.

The preclosure redemption penalty is designed to discourage buyers from redeeming their bonds earlier than maturity. It’s because the federal government needs to make sure that it has entry to the funds raised by the bond challenge.

There are a couple of exceptions to the preclosure redemption penalty. For instance, the penalty doesn’t apply if you’re redeeming your bond to buy one other Second Wage Nationwide Bond. The penalty additionally doesn’t apply if you’re redeeming your bond since you are retiring or since you are experiencing monetary hardship.

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In conclusion, the Second Wage Nationwide Bonds Scheme stands as a transformative funding alternative for expats. By combining the advantages of versatile saving and revenue intervals, aggressive revenue charges, a rewarding Rewards Program, and quite a few extra benefits, the scheme empowers expats to safe their monetary future whereas having fun with the journey. Nonetheless, the scheme can’t be used as a spot to park emergency funds since there are penalties concerned for redeeming the funds in addition to the scheme requires a minimal funding interval of three years, which can not present fast entry to funds when wanted and Lastly there’s market danger concerned. Therefore, people seeking to make investments on this scheme need to be cognisant of the dangers concerned and whether or not or not the scheme fits their funding horizon.


This text shouldn’t be construed as funding recommendation, please seek the advice of your Funding Adviser earlier than making any sound funding choice.

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Additionally Learn: A information to investing overseas by means of Liberalised Remittance Scheme (LRS)