Standard Chartered XtraSaver Account Review 2022

Standard Chartered XtraSaver Account Review 2022 – that will be the topic of today’s article.

It continues our reviews of savings accounts after I looked at Marcus by Goldman Sachs , Emirates NBD, HSBC Term Deposit, Bank of China Smart Saver, Citibank’s Time Deposit Account and an expat-specific solution.

The article will look at the positives and negatives of the accounts, although it remains our position to in an era of 0% interest rates, saving money in the bank doesn’t make sense.

If you want to invest as an expat or high-net-worth individual, you can email me (advice@adamfayed.com) or use these contact options.

Introduction

Nowadays, everyone, needs banking services with all the main functions. Banks in the United Arab Emirates offer various banking services to both individuals and legal entities. One of the most common services is the placement of funds in accounts with banking institutions with further transactions carried out using these bank accounts.

A savings account is a type of bank account designed for the continuous accumulation of funds. It can be topped up with small amounts of money. Partial withdrawals are also permitted. As a rule, there is no fixed period for keeping money in a savings account. 

However, you must notify your bank before you can withdraw money. The sooner you notify the bank about your desire to withdraw funds, the higher the interest rate on the account. Very often, banks set a limit on the amount that a customer can withdraw from their savings account. There are also limits on the minimum account balance. Savings accounts around the world and in the UAE in particular enable people to plan and control their finances more effectively.

In this article we will talk about one of the most popular banks called Standard Chartered, and discuss the bank’s savings account called XtraSaver Account. 

Standard Chartered is a multinational corporation providing financial services primarily through a subsidiary of Standard Chartered Bank. It was formed in 1969 as a result of the merger of Chartered Bank of India, Australia and China and Standard Bank of British South Africa. The headquarters is located in London, but the bank has no branches in the UK, the main regions of activity are the countries of Asia and Africa, primarily Hong Kong and Singapore, and of course the bank is popular in the United Arab Emirates.

In the 2018 Forbes Global 2000 list of the largest public companies, Standard Chartered took 309th place (including 55th in terms of assets, 468th in terms of turnover, 404th in terms of market capitalization and 883rd in terms of net profit). In the list of the largest banks in terms of assets, Standard Chartered Bank took 51st place at the end of 2017, and in the list of the largest banks in the UK it is fifth. Since 2012, it has been one of the globally systemically important banks.

1. Standard Chartered XtraSaver Account Overview

Now it is turn to talk about the bank’s saving account, talk about its features, advantages and disadvantages, also see what kind of risks expat can have while opening an XtraSaver account in UAE and many more necessary information you can find in this article.

Standard Chartered Bank UAE launched XtraSaver, a high interest rate savings account designed to reward customers for keeping their savings deposits with the Bank for an extended period of time.

Depending on the transactional behavior, customers will earn 1% p. a., every month for the first two months in a row, and then 1.5% per year starting from the third month in a row, provided that no more than one debit transaction is performed on the account per month. The maximum interest balance is 2 million UAE dirhams.

Additional account benefits include a debit card with a chip and PIN for making purchases or withdrawing cash, daily accrued interest and universal account access via Internet Banking, Breeze banking, Phone Banking and bank branches.

Shehzad Hamid, Head of Retail Banking in the UAE, Standard Chartered, said: “XtraSaver is a high-interest savings account with added flexibility. Customers benefit from a higher interest rate and the ability to transfer funds when needed through our digital channels or at a branch. I am confident that the launch of this product will further strengthen our customer loyalty and strengthen our relationship with them. ”

*Main Benefits

• Earning attractive interest rates starting at AED 3,000 – with XtraSaver you can earn up to 1.5% per year * based on your average monthly balance. Just open an account for a minimum amount of AED 3000.
• Contactless debit card –are accepted all over the world. There is a 24/7 access to your funds for ATM withdrawals, online purchases or retail outlets. But this is not available for USD account.
• Available in USD and AED currencies – no matter what the purpose is, an XtraSaver account gives you the flexibility between AED and USD currencies to save money and get a better return on your savings.
• Easy access to your account – you can withdraw funds anytime with convenient access to your account via Phone Banking, Online Banking and the SC Mobile app.

*About the prices

First of all, there is no minimum balance requirement. The bank offers you to earn 0.50% in the first 2 months and up to 1.50% after the first 2 months. However, the 2% interest rate applies only to the maximum amount of AED 2,000,000 and the income will be given only from AED 3,000.

Although the bank offers two currencies (AED & USD) this account can only be opened with AED. The account commission is free as long as the minimum balance is met. If the balance is less than the required minimum, a monthly fee of AED 25 will be charged.

Now let’s see how much you will earn if you open an account of AED 5,000. In the first month, the consequent interest rate will be 0.50% and at the end of the first month, the total average balance will be AED 5,002. From this, you can conclude that investing for a month is not the best option. In the second month, the interest rate will be again 0.50 but the monthly interest will be 4.17, so at the end of the second month, you will have AED 10,006 on your balance.

In the next months, the interest rate will be 1.50% which is a competitive percentage and in the sixth month, you will have AED 30,119 on your balance. So, with Standard Chartered and with every bank you will choose as your future banking system, you have to save for the long term, to have a higher income in the end.

Remember that the interest rate is calculated based on the monthly average balance in the account and paid on the last business day of each calendar month, with no minimum balance requirement.

Pros:

• A good-working online banking platform, which is available on the iPhones, iPads and Android gadgets.
• 24/7 access to your funds, you can withdraw them whenever you want.
• Earning high interest depending on your balance and use of debit card.
• No minimum balance requirements.
• Interest is compounded daily and paid monthly.
• Two currencies available: AED and USD.

Cons:

• A fee is applicable if the account drops below the minimum balance required.
• The interest rate is not the highest in the financial market, you can easily find banking services with up to 3-4% interest rates.
• Monthly fees about AED 25.
• There are no rewards on this account.

2. How to open an account?

If you are from UAE and are truly interested in Standard Chartered Bank and also if you want to have your savings account so here is a quick guide on how to open an account and what documents and information you will be required to present. 

On the official site of Standard Chartered you can easily find the section of XtraSver Account and see a button called ‘Apply Now’. When you click on it a new tab will be opened with a few empty lines that you have to fill in such as your full name, mobile number, email, the country you live in, also choose the type of the product, if it’s Conventional or Islamic, after choosing the wanted currency and click OK. They will contact you and accept your application.

 Eligibility & Documents

• Nationality – this is the most important part, you must be a UAE National resident or a non-resident individual
• You have to be minimum 18 years old

Required documents if you’re a resident

• Passport
• Emirates ID
• Resident Visa

If you’re a non-resident

• Passport 
• Bank Statement
• Address Proof

3. Savings vs Investments

A lot of people are confused if they want to open an investment or savings account, because they cannot decide themselves if they are ready to say bye to their funds for a long term or a short-term. So here under this subheading you can find the answers and finally decide if you want to invest or to save.

What to do? The answer depends on what you have planned for the future and what you want to do with your funds. First, let’s take look at the most important differences between saving and investing. After what you will definitely know what is right for you.

Generally speaking, when you put your money into an investment account rather than a savings account, you can expect more return in the long run, but with some risk. Your profit depends on how efficient your investment is. The cost of an investment can increase or decrease.

When you put money into a savings account, they collect interest at a stable, rarely changing rate set by your financial institution. You can get a predictable income, but you have the opportunity to earn more through investments.

How savings accounts work?

The money you put into your savings account pays interest. If you want to maximize interest on the money in your savings account, you should opt for a High Interest Savings Account (HISA) – you can get 1.5% or even 2.45% per annum on your savings. 

Be aware that some financial institutions may hold promotions in which the interest rate is higher in the first few months and then significantly reduced. Others may have restrictions on the minimum balance and frequency of withdrawals. 

If you remember Standard Chartered doesn’t have this kind of risks, and moreover, the interest rate increases after the first two months. 

How investing accounts work?

When you deposit money into an investment account, you can invest in various assets, most commonly stocks and bonds. It is more profitable to use an investment account instead of a savings account if you plan to keep your invested money for more than one year.

All investments have a certain level of risk. If you’re new to investing, this may sound daunting, but remember that risk and reward go hand in hand. While the stock market does go down at times, historically it has always rallied in the long run, and as an investor, you can benefit from these profits.

The type of investment you choose will depend on your future goals, risk tolerance, and how much money you have to work with. If you have a long time horizon before you plan to use the money, you can choose a portfolio with a higher level of risk. These portfolios usually consist of stocks and other assets. You have a chance to make high profits, but there is also a chance that you could lose money if you withdraw money when the stock market is low.

If you plan on using funds in less than five years, you probably want to choose a portfolio with a lower risk level. These portfolios usually have a large mix of assets with relatively low volatility, such as bonds, mortgages, and other income-oriented investments. You can look forward to lower returns, but you probably won’t lose much money.

It’s better to use a savings account instead of investing if:

• You plan to spend money in a year or less.
• You are creating an emergency fund.
• You are just starting to save.
• You don’t like investment risks.

It is better to invest than save if:

• You are making long-term plans.
• You have already prepared a reserve fund.
• You want to take advantage of the rise in the stock market.

4. Risks of savings accounts

While savings accounts definitely have a place in your financial plans, like keeping money in your emergency fund, keeping all of your money in a savings account is probably not the best option due to the shortcomings of savings accounts.

• Minimum Balance Fees and Requirements – Some savings accounts have monthly fees or minimum balance requirements that you must meet to avoid monthly fees. If your balance does not exceed the required levels, the bank may charge a commission, which can become quite costly for you to open a savings account. Look for banks that offer savings accounts with no minimum balance requirements to avoid this drawback.
• Your bank may have restrictions on savings account transactions – although it is easy to transfer funds to and from a savings account, there may be restrictions on the number and types of withdrawals allowed for each statement cycle. You can make as many deposits as you want, but your bank may restrict certain types of telephone and electronic withdrawals (not including ATM cash withdrawals) and transfers per statement cycle, which can limit the portability of your money.
• Rates are subject to change – interest rates on savings accounts are variable, which means that financial institutions can set and change interest rates as they see fit. The rates on high interest savings accounts will generally be in line with changes in the federal rate.
• Inflation – if your savings account does not pay a competitive interest rate, inflation can eat up the value of your earned interest, leaving you with an account balance that will be worth less than today’s dollars a year from now.
• Compound interest – most traditional banks or credit unions charge interest on your savings account monthly or even annually. This means that it is not always possible to realize the full potential of your money, especially when compared to other investment opportunities.

5. Comparing with other savings accounts of UAE

If you are from UAE and you want to open a savings account so here you can find different bank savings account options and compare them. You probably know what the two most important factors to compare the accounts are: the interest rate and the minimum investment amount. 

Everyone wants to be free from extra payments and not be nervous every month to keep a minimum amount on balance. The main idea of opening a savings account is to earn some money, to get higher incomes, and surely, the preference will be given to the bank, which offers a higher interest rate and offers suitable terms.

Now let’s see what other savings accounts you can open in UAE and see which of them the best in the financial world is.

• ADCB Active Saver Account – This online ADCB account is another tiered account that pays 1.5 percent on balances between AED 10,000 and AED 500,000, and a maximum of 1.65 percent between AED 2 and 10 (up 1 percent). Customers also earn TouchPoints, bank loyalty bonus points, each time their balance increases by AED 1,000. Existing ADCB customers can apply for an Active Saver account through the online banking portal and set it up instantly. There is no minimum balance requirement and there is also a Sharia-compliant option available from ADCB Islamic Banking. This is another online account that lowers interest on higher balances, again to attract middle-income savers.
• CBI eSaver Account – The list of banks in Dubai offering good interest rates and rewarding banking experience includes CBI. They have up to six different save options, but the most popular is their eSaver account. So if you have absolutely no balance in your account or are looking for a high interest rate option, this might be the best zero balance savings account in Dubai! If you have more than AED 5 million, they offer an attractive interest rate of 3%. Even their minimum rates are quite impressive, starting from 2% for less than 300 thousand dirhams. However, these rates only apply to new funds.
• HSBC Term Deposit Account – the annual interest rate is up to 3%. You can increase your savings with the HSBC Time Deposit Account by reinvesting both the principal and the interest. Available currencies include AED, GBP and USD. HSBC Time Deposit Account customers receive special services such as free online banking, telephone and mobile banking, and free text messages. The term of their savings ranges from one month to 36 months, however, the longer you commit, the better the interest rate will be. The monthly interest rate starts from 0.43% UAE dirhams with a balance of less than 150 thousand UAE dirhams.

Now you have a few different options of savings account, with different interest rates, requirements, and rewards. Also, you learned more about savings and investment accounts and now you know what the best option for you and your funds is. 

Broadly speaking, it’s really difficult to choose the bank, with which you will work in the future, as there are a lot of financial services offered with attractive interest rates and other requirements. The only thing you can do is to separate some possible banking services, learn them; their terms of use, and after making your decision.

Further Reading: Zurich International Vista Savings Plan Review explores offshore savings strategies, akin to Standard Chartered XtraSaver Account Review.