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The Best Investments For Young Adults In The UAE

The Best Investments For Young Adults In The UAE.

If you are to invest as an expat or high-net-worth individual, which is what I specialize in, you can email me (advice@adamfayed.com) or use WhatsApp (+44-7393-450-837).

Introduction

Here are seven best investments for young adults in the UAE. These are merely suggestions and are not required to invest in each one. However, if you start investing in two or more and increase your investment regularly, your wealth will surely start to increase swiftly.

The UAE is a very rich country, no wonder why young adults in the country are interested in investment as early as their early 20s. Even when the stock market is unstable, you’re always being urged to make investments. Some even contend that current prices make now the ideal time to make investments. But what exactly are the best investments for young adults in the UAE?

7 Best Investments For Young Adults In The UAE

1. Savings Account

Savings accounts offer high liquidity and are one of the most popular financial products. You may easily withdraw money from your savings account whenever you want and wherever you are. However, banks often limit the return on a savings account to between 4 and 7 percent.

2. Fixed Deposits

One of the finest short-term investing alternatives in the UAE is a fixed deposit (FD). You may simply put your money in FDs anywhere for up to 10 years, and they are safe investments. While an investor may withdraw funds before to the maturity date of an FD, it is advised to do so only after the maturity date due to the FD’s lack of high liquidity.

For instance, if you invest in a 2 year fixed deposit that pays a 10% interest rate and decide to withdraw the money after 6 months, the financial institution would give you the interest rate that was in effect at the time for a 6 month fixed deposit, which may have been as low as 6%. 

Additionally, if you withdraw money before the loan’s maturity date, you could have to pay a maximum penalty of 1% of the interest. But it could differ from one bank to another.

The Best Investments For Young Adults In The UAE
Fixed Deposit

3. Liquid Funds

They essentially operate as a particular type of mutual fund that invests your hard-earned cash in short-term government certificates or securities of deposits. The fact that investors may take money out of these funds whenever they want is the finest part. However, as the redemption process takes two to three working days, it is not suggested to place your emergency savings in liquid funds.

This short-term investing strategy’s main advantage is that it provides a high rate of interest—up to 7%—on all investments. You may anticipate more security for your investment because the money in liquid funds is placed in money market products.

4. Equity Derivatives

These are some of the more practical short-term investment plans, particularly for individuals with excellent stock market knowledge. Equity derivatives, however, may be flammable in terms of price fluctuation, therefore an investor must have a high risk tolerance to do these forms of trades.

Furthermore, because the bulk of these derivatives investments have an expiry of little more than three months, these sorts of investments are made with a short-term perspective.

The Best Investments For Young Adults In The UAE
A 17-year old stock trader in Dubai

5. Fixed Maturity Plans (FMPs)

FMPs are limited term investments with a set maturity date and are idealized as “close-ended debt funds.” FMP returns are not guaranteed, however many customers choose this option if they need a lump sum investment solution.

The Best Investments For Young Adults In The UAE
Fixed Maturity Plan

6. Silver and Gold Investments

As a short-term and long-term buffer against inflation, precious metals like gold and silver are regarded as one of the greatest investment possibilities. In the past, the value of gold and silver has fluctuated between high short-term prices and low long-term prices.

This is what makes investing in these precious metals for the short term wise and low-risk. When compared to other short-term investing choices on the market, these sorts of investment plans tend to be more liquid.

7. Recurring Deposits

For investors who don’t want to make a single large investment, recurring deposits (RD) are the best choice. Instead, RD gives you the freedom to make periodic investments. Banks and other financial institutions’ recurring deposits have a minimum term of six months and a maximum tenure of ten years. However, take notice that the interest rate gained on RD is taxed.

Final Thoughts

All of the aforementioned short-term investment options are among the best investments for young adults in the UAE, even if there are many more short-term investing possibilities in the country. To get the most of your money, choose any of the options that suit your needs and you can sustain.

Pained by financial indecision? Want to invest with Adam?

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Adam is an internationally recognised author on financial matters, with over 744.2 million answer views on Quora.com, a widely sold book on Amazon, and a contributor on Forbes.

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