# Bank Deposit Insurance?



## BettyBell (Feb 10, 2009)

I'm sorry if this has been posted before but is there any kind of deposit insurance for UAE/Dubai banks? I'd hate for my savings account to just go poof. And I just got here from America, where quite a few banks have failed, including mine, so I'm nervous! 

I asked at HSBC in Mall of Emirates and the rep said he had never heard of that before but assured me that banks in Dubai never fail....


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## Elphaba (Jan 24, 2008)

Towards the end of last year the UAE (federal) government announced that they were guaranteeing all UAE bank accounts. 

I wouldn't recommend that savings be kept in the UAE, due the effects of Sharia law on death. You should keep savings offshore.


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## Elphaba (Jan 24, 2008)

I forgot to say

Welcome to the forum! 


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## BettyBell (Feb 10, 2009)

Thanks for the reply, Elphaba! I feel a lot better now. I wish had enough funds to open an offshore account...



Elphaba said:


> I forgot to say
> 
> Welcome to the forum!
> 
> ...


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## Elphaba (Jan 24, 2008)

BettyBell said:


> Thanks for the reply, Elphaba! I feel a lot better now. I wish had enough funds to open an offshore account...



You don't need much to open an offshore account. I have agencies with banks with a minimum of GBP 2,000 or equivalent in USD or Euros.

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## dash567 (Nov 5, 2008)

Elphaba said:


> You don't need much to open an offshore account. I have agencies with banks with a minimum of GBP 2,000 or equivalent in USD or Euros.
> 
> -


Hi Elphaba, I wonder if you could be so kind to give your opinion on which of the three currencies (above) one should consider when opening an offshore account (bearing in mind payment in AED in Dubai) and shed some light on whether, in your experienced view, it would make any difference if one was to arrange an offshore account to be opened from one's bank in the UK instead of the same in the UAE. 

Lastly, when people talk about offshore banking in the UK, then most likely the geographical focus is on the Channel Islands... What I haven't been able to ascertain is where an offshore account opened through one's bank in the UAE (say NBD) would be domiciled?

Many thanks in advance for any thoughts and/or starters 

Best, D


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## Elphaba (Jan 24, 2008)

dash567 said:


> Hi Elphaba, I wonder if you could be so kind to give your opinion on which of the three currencies (above) one should consider when opening an offshore account (bearing in mind payment in AED in Dubai) and shed some light on whether, in your experienced view, it would make any difference if one was to arrange an offshore account to be opened from one's bank in the UK instead of the same in the UAE.
> 
> Lastly, when people talk about offshore banking in the UK, then most likely the geographical focus is on the Channel Islands... What I haven't been able to ascertain is where an offshore account opened through one's bank in the UAE (say NBD) would be domiciled?
> 
> ...


If you are paid in Dirhams, then there is no currency exchange issue with having an offshore account in USD. Once you have a balance somewhat above the minumum, you can consider having secondary accounts in other currencies so you can take advantage of exchange rate fluctuations and also plan for a possible move back to the UK.

Most offshore accounts are in the Isle of Man or Channel islands. NBD and most other UAE banks don't offer offshore accounts. For example, I can arrange accounts with UK, Irish and SA banks, but in the jurisdictions mentioned.

Hope that helps.

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## Andrew Farrant (Feb 9, 2009)

Fantastic question from Betty Bell that will throw up lots of follow on discussion I am sure - 

Elphaba, you mentioned Sharia law and death, so I take it the sensible plan as you said is to have an offshore account. Did you mean offshore is in "not dubai" or as in "not your native country" ? I see you are from the UK, so maybe I can make the questions a little more specific .....

If for example, I earn money tax free in dubai, then send it to for example HSBC in my own country (UK) to a savings account, am I liable to UK tax ? The money would be earned outside of the UK whilst I was ex pat so are there tax implications taking the money back into your natural country ?

The questions are driven by my need to continue paying my UK mortgage whilst I am in dubai, and to send money to various family members


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## dash567 (Nov 5, 2008)

Elphaba said:


> If you are paid in Dirhams, then there is no currency exchange issue with having an offshore account in USD. Once you have a balance somewhat above the minumum, you can consider having secondary accounts in other currencies so you can take advantage of exchange rate fluctuations and also plan for a possible move back to the UK.
> 
> Most offshore accounts are in the Isle of Man or Channel islands. NBD and most other UAE banks don't offer offshore accounts. For example, I can arrange accounts with UK, Irish and SA banks, but in the jurisdictions mentioned.
> 
> ...


Thanks Elphaba! This is very helpful indeed by way clarification. From what I have understood, most people opt for USD offshore accounts also because of the fact that the AED is seemingly pegged to it somehow (still reading around and trying to understand the implications of this more fully); however, considering that the final destination (e.g. bill payment purposes) will be the UK and therefore GBP, I'm just a bit worried in light of the more volatile relationship between the two latter currencies esp. when one glances back at their relative standing these past couple of years... 

I guess what I'm essentially trying to establish (and not an easy assessment might I say) is whether one would potentially face a situation in which one would take a hit on the USD/GBP conversion thus nullifying any potential benefit to be gained from the value of the AED being pegged to the USD... I hope this makes some sense and thanks once again...

PS: not really worried about the savings being in USD particularly since its very unlikely that interest rates on savings will approach anything near what we've seen in the past years in the near foreseeable future - at least according to my managers in the UK!???


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## Elphaba (Jan 24, 2008)

Andrew Farrant said:


> Fantastic question from Betty Bell that will throw up lots of follow on discussion I am sure -
> 
> Elphaba, you mentioned Sharia law and death, so I take it the sensible plan as you said is to have an offshore account. Did you mean offshore is in "not dubai" or as in "not your native country" ? I see you are from the UK, so maybe I can make the questions a little more specific .....
> 
> ...


The term 'offshore' when referring to bank acounts is used to descibe accounts held in specific jurisdictions - mainly Isle of Man or the Channel Islands. There are certain tax and legal advantages that apply.

If you are registered as UK non-resident for tax purposes, you may have a liabilty to UK tax on income that you remit to the UK, above your personal allowance. 

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## Andrew Farrant (Feb 9, 2009)

Thank you, please forgive my naive and basic questions, I do what I do very well but ....... I am to international finance what Dame Edna Everidge is to undersea welding - so if I earn money in UAE and I need to pay my mortgage in the UK, how do I pay it without incurring UK income tax ? 

Do I merely transfer money every month to my UK account and have the payments go out as normal, or do I pay it directly from my UAE bank or do I use an intermediary offshore account like Isle of Man ? Surely many many people have faced exactly the same question.


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## BettyBell (Feb 10, 2009)

I also have a mortgage (US), and am earning money in Dubai. I'm not sure what will work in your specific situation, but this is what I'm doing. I still have US-based bank accounts from which I will draw from to pay bills and mortgages incurred in the US. As I earn here in Dubai, I will save and spend this money here. The plan is to minimize the cost of transferring and converting money, and transfer AEDs to USDs in large chunks and not very often.



Andrew Farrant said:


> Thank you, please forgive my naive and basic questions, I do what I do very well but ....... I am to international finance what Dame Edna Everidge is to undersea welding - so if I earn money in UAE and I need to pay my mortgage in the UK, how do I pay it without incurring UK income tax ?
> 
> Do I merely transfer money every month to my UK account and have the payments go out as normal, or do I pay it directly from my UAE bank or do I use an intermediary offshore account like Isle of Man ? Surely many many people have faced exactly the same question.


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